[IMAGE] Forums Discuss these points in the Forums:  Forexnews Forum       Technicals Live Charts Analysis available from: Cornelius Luca   J.P. Chorek   Technical Research Ltd.   Charts & News featuring Standard & Poor's        Interest Rates  US: Japan: Eurozone: UK: Switzerland:   1.75%  0.15%  3.25%  4.0%  1.25-2.25%        [IMAGE]   	 [IMAGE]  Wall Street Set To End Week Lower, But USD Adds To Gains January 18, 7:00 AM: EUR/$..0.8811 $/JPY..132.84 GBP/$..1.4350 $/CHF..1.6684  Wall Street Set To End Week Lower, But USD Adds To Gains by Jes Black  At 8:30:00 AM US Nov Int. Trade (exp -28.8 bln, prev -29.4 bln) At 9:45:00 AM US Jan Univ of Michigan Sent prel (exp 89.3, prev 88.8)  The dollar held onto its gains on Friday, going into the US session up about one percent against the majors since Monday. USD rose steadily despite a roughshod week on Wall Street that fluctuated with the mixed data and sentiment. The Dow fell nearly 300 points by mid-week before rallying overnight on more upbeat data and earnings announcements after Wednesday's sell-off.  In Tokyo trade, USD/JPY surprised the market with a rally to a 1-week high of 133.03 after holding above support at 132.40 overnight. The move bodes well for a resumption of its rally after a weeklong decline stabilized around 131.80 on Tuesday as corrective yen buying slowed. USD is now targeting last week's 3-year high of 133.37. Support is seen at 132.40 and 131.80, the 61.8% and 38.2% Fibonacci retracements of the move from 133.37 to this week's low of 130.85. Resistance is seen at last week's 3-year high of 133.37 and only a break of this level is seen bringing back the bull, dealers say.  EUR/JPY regained the 117 level after hitting an overnight low of 116.01. Again, moves in the JPY will be important to watch as most of EUR/USD losses on Tuesday and Wednesday came on the back of a steep fall in EUR/JPY to a low of 115.67 from a high of 119.37 last week, or a 3% drop. Since EUR/JPY rise was steeper than that of USD/JPY there was a steeper reversal. Support is now seen at 116.50 followed by key support at 115.60. Resistance is seen at 117.00 and 117.50. A close above 116.50 will be needed in order to maintain its bullish momentum, dealers say.  Overnight comments from Japan's PM Koizumi and FinMin Shiokawa showed their reluctance to talk about the yen, except to say that it was for markets to determine the appropriate levels. However, BoJ Governor Hayami interjected that no central bank likes a weak currency and that it was important for Japan to maintain a strong yen. Hayami also said other central banks have questioned Japan's yen stance, but that the BoJ is not tolerating a weak yen, nor the MoF. These remarks failed to stem the yen's fall as markets see further weakness ahead for the JPY ahead of painful reforms.  EUR/USD hovered in a tight 20 pip range around 88 cents as lack of European data kept currencies movements to a minimum in London trade. Markets are also eyeing this morning's US economic data as well as a key meeting between representatives of the National Association of Manufacturers (NAM) and the US Treasury Undersecretary for International Affairs Taylor to discuss the consequences of a strong dollar. Therefore, dealers were careful not to get to enthusiastic about the dollar ahead of today's meeting given that when this happened last July, USD fell because the administration appeared uncertain over the strong dollar policy.  NAM Vice President Vargo argues that the strong dollar policy is hurting US exports and slowing down the recovery of the US economy. Vargo thinks that the dollar is currently overvalued because of its strength against the major currencies in spite of the US slowdown. However, manufacturers are unlikely to get the US administration to change its policy given the need to continue to finance the US current account deficit with foreign inflows of capital. A fall in USD would stem that flow. Moreover, the US administration is expected to continue to let JPY fall in order to keep Japan from falling into a deflationary spiral as many economists fear.  In fact, the first data to be released today is the international trade figures for November. The large deficit is expected to fall slightly, as it usually does in a recession, to 28.8 from 29.4 billion. Like past recessions, imports are expected to decrease faster than exports as a consequence of the global slowdown.   Markets will be more interested in knowing how the consumer perceives the economic outlook and the University of Michigan's confidence survey is forecasted to rise to 89.3 in the preliminary January reading from the previous 88.8. This would be the fourth consecutive gain, but today's consumer sentiment data isn't expected to move markets unless it surprises on the up or downside.  Meanwhile, the majority of major earnings announcements came to pass this week. Overnight, Microsoft saw strong sales that topped Wall Street expectations, prompting a rebound in US stocks. Positive earnings from Citigroup, Compaq, General Electric, Apple Computer and Sears, as well as the rebound in the Philadelphia Fed survey pushed the Dow up by 1.4% or 137 points to 9850 and NASDAQ by 2% or 41 points to 1985. But US stock futures look poised to spoil those gains with Dow down 59 and Nasdaq down 25. Today's key release includes Sun Microsystems which is expected to show a small loss in Q4.  GBP/USD fell to key support around 1.4330 in European trade after plunging to a 5-week low of 1.4300 overnight. But losses were mitigated by sterling's strength against the euro, which was trading near an overnight 3-week low near 61.20 pence. Since EMU mania subsided EUR/GBP is now back to trading around Jan 1 levels. However, cable's position will remain weak if it cannot maintain above 1.4440 after it fell from last Monday's 2-week high of 1.4513, a 2-cent drop in 4 days. Resistance is seen at 1.4390, 1.4440, 1.4480, 1.450 and 1.4550. Key support at 1.4330, the 50% Fibonacci retracement of the move from 1.4060 to 1.4606. A break of that level would call upon 1.43 on its way to 1.4267, the 61.8% retracement of the same move.  USD/CHF fully recovered from Wednesday's 1% sell off to a low of 1.6445. Swissy regained support at 1.6540 and successfully broke back through resistance at 1.6680 on its way to a day's high of 1.6702 in London trade. Gains are seen capped at this week's high of 1.6730, which marks the 61.8% Fibonacci retracement of the move from 1.6955 to 1.6355. Support is seen at 1.6540 and 1.6510. Major trendline support is seen at 1.6460.     	[IMAGE] Audio Mkt. Analysis Earnings, Philly Fed Survey Support Dollar        Articles & Ideas  Philly Fed-Supported Optimism   EUR/USD: Technical Analysis       Articles & Ideas Forex Glossary   Economic Indicators   Forex Guides   Link Library      [IMAGE]  	
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