[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:   2.0%  0.15%  3.25%  4.0%  1.75-2.75%       [IMAGE] 	 [IMAGE]  Euro Slips on Ifo Dip, USD Outlook Steady  November 21, 7:00 AM: EUR/$..0.8796 $/JPY..122.85 GBP/$..1.4196 $/CHF..1.6559  Euro Slips on Ifo Dip, USD Outlook Steady by Jes Black  At 8:30:00 AM US Nov 17 Jobless Claims (exp 450 k, prev 444k) At 10:00:00 AM US Nov final U. of Michigan index (exp 83, prev 83.5) At 2:00:00 PM US Oct Fed. Budget  (exp -11 bln, prev  35.4 bln)  The euro came under pressure today following another fall in the key business sentiment survey for Germany. The Ifo business survey fell to an 8-year low of 84.7 in October after plunging in September to 85.0 from 89.5. Since the headline index did not stabilize, it implies that September's steep decline was not just an overreaction to the terrorist attacks on the US and that the economic environment in the Eurozone is actually worse than previously thought. More trouble lies ahead for the Eurozone considering the expectations index fell to 89.6 from a downwardly revised 90.5, meaning that we still have not seen a bottom in the Ifo or the euro.   EUR/USD fell to a session low of 87.81 after the release but held above a 3-month low of 87.67 reached on Monday. The euro has still to test key resistance around 87.45, but with the Eurozone's number one economy now teetering on the edge of a recession, markets are likely to punish the euro again. On Tuesday, the Bundesbank's monthly report for November indicated that Q3 growth was likely to be zero to negative after posting slightly negative growth in Q2 of -0.003%. The Ifo report suggests that Q4 growth will also be negative and that could push Germany into a technical recession. Today's release by the European Union forecasted growth in Germany to stagnate at 0.7% in both 2001 and 2002.  USD/JPY fell to a session low of 122.57 after failing to break key resistance around 123.40 earlier in the day. JPY came under renewed pressure this morning after S?Tokyo Head Chang Yu-Tsung was quoted as saying Japan's sovereign rating could be downgraded again after the S?revised its outlook on Japan's AA rating to "negative" in September. However, offers reported around 123.50 kept a cap on the dollar's gains. A fall in EUR/JPY from highs around 108.81 to a session low of 107.74 also gave JPY some strength.   USD/JPY rose to a 3-month high of 123.49 on Monday and has since eased off its highs. But any selling coming ahead of the long holiday weekend should not be enough to offset the overall bullish trend. Sentiment continues to underpin USD because of the renewed momentum in US equities as investors show an increasing appetite for risk. The yen will also stay under pressure from mounting worries about the Japanese banking sector ahead of a slew of earnings reports by major Japanese banks on Thursday. Moreover, with little room for improvement in the Japanese economy until late next year, most market watchers see the yen heading for 125 now that it has successfully breached the 123 mark. Resistance is seen around 123.35/45. But USD/JPY support is expected to hold at 121.95/122.00 followed by 121.40/50, with any pullback towards the latter level seen as a buying opportunity, dealers said.  GBP/USD remained in a tight range of 1.4150 to 1.42. The dollar held sterling's recovery to the 1.42 mark after cable plunged to a 3-month low of 1.4080 on Tuesday morning. Cable was little moved by the fall in EUR/USD as it was offset by a simultaneous fall in EUR/USD. Meanwhile, GBP/USD is still in a bearish trend given its inability to maintain gains above the key technical level of 1.4195.  US Q3 GDP due next Friday is expected to show a decline of 0.9%, but St. Louis Fed President Poole on Tuesday affirmed US economic growth would revive in a matter of months and not years because of low inflation, competitive markets and the combination of Fed and fiscal policy that are supporting the economy. However, Poole cautioned that an exact recovery was uncertain, but that the Fed still has more room to cut US interest rates if needed.  Given the high degree of uncertainty surrounding the US, the Fed's commitment to growth is one of the reason's the dollar has performed well despite the near certainty of a recession. It is also explains why the Morgan Stanley Capital International index is expected to be reweighed in favor of US equities. On the basis of the adjustments MSCI is making, Japan, France and Germany are likely to see the most money leaving their markets, while the UK and US will be the largest beneficiaries.  Today's data from the US is expected to show jobless claims have edged off the 500k pace in October. However, the continuing layoffs is expected to push the final reading of the Univ. of Mich consumer sentiment survey down to 83.0 from 83.5 previously.   	[IMAGE] Audio Mkt. Analysis USD Pairs Gain Across the Board       Articles & Ideas  USD/JPY: The Next Level   OPEC: The beginning of a price war?       Articles & Ideas Forex Glossary   Economic Indicators   Forex Guides   Link Library      [IMAGE] 	
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