[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]  USD and JPY Rangebound Ahead of Greenspan and Japan  February 25, 7:00 AM: EUR/$..0.8735 $/JPY..133.89 GBP/$..1.4290 $/CHF..1.6918  USD and JPY Rangebound Ahead of Greenspan and Japan by Jes Black  At 10:00:00 AM US Jan Existing Homes (exp 5.2 mln, prev 5.19 mln)  The dollar recouped about half of Friday's losses against the euro and sterling but remained mired in recent ranges ahead of this week's key policy meetings and economic data. Fed chairman Greenspan is set to speak on Wednesday and upbeat US data are expected to allow the chairman to take an optimistic tone. But accounting concerns have so far constrained the dollar despite signs of a nascent recovery.   EUR/USD fell to a day's low of 87.33 but maintained above support at 87.35/40. A break of 87.40 targets 87.00/10 followed by 86.50. But the dollar could come under further pressure if investors were seen to be avoiding the US market. Therefore, a key factor for EUR/USD this week is corporate sentiment and the direction of US equities. Dealers will closely scrutinize capital flow data to the US and Eurozone. Worries could send the dollar lower across the board and possibly toward 88.80 against the euro in the near term, despite positive economic data from the US. Resistance is seen at 88.00, 88.60 and even 88.80. But if the pair was to fail breaking the last resistance zone, it could resume its downtrend from there. This reflects the view that US equity losses are also a temporary phenomenon and that a rise in the euro is not a reflection of its own strength.   Tuesday's German Ifo business survey will also be key to the euro's near term direction as markets expect a rise to 87.3 in February from 86.3. Business confidence probably improved again but has yet to reach the pre-September 11 level of 89.3. However, expectations have greatly improved, as evidenced by last week's surge in the German ZEW sentiment survey to 50.2 from 35.9 in January, which foretells a significant improvement over the next 6 months.  GBP/USD fell to a day's low of 1.4284 as it came under increasing pressure against both the euro and dollar. GBP/USD fell half a cent to a day's low of 1.4287, while sterling also fell to a low of 61.25 pence agaisnt the euro. GBP/USD support seen at at 1.4285, 1.4235, 1.4200 and 1.4150. Upside capped at 1.4340, 1.4365 and 1.440. Sterling remains weak after back-to-back surprise declines in UK retail sales were seen as a sign that the UK's two-speed economy may be converging finally. With consumer spending falling and manufacturing slowly rising, it stands in sharp contrast with the upbeat outlook for the US. GBP also likely to remain under pressure after PM Blair has stepped up the EMU propaganda machine, which can weigh on the pound because markets anticipate the pound to join at a lower value. Moreover, fears of pension reform that could divert asset away from UK investments, and a possible tax hike to pay for health care reform are two other factors weighing on sterling.  Meanwhile, the yen rose on short covering today ahead of this week's two key events in Japan. First, the Japanese government is expected to finally release its anti-deflation package on Wednesday, along with proposals for dealing with non-performing loan disposal. Dealers will look for any new easing measures taken by the Japanese to tackle deflation. But Should Japanese officials think that the coming global recovery will allow them to muddle through and not enact tough love reforms, then the market is likely to be disappointed and sell the yen.  Then, the Bank of Japan meets on Thursday to set monetary policy, and dealers think the central bank may increase its purchases of Japanese government bonds to 1 trillion from 800 million. However, this is not expected to satisfy the FX market, which has come to view liquidity as more or less a mute point amid rampant deflation and lack of demand. Therefore, the yen is in a lose-lose situation because if the BoJ takes no action the yen is likely to weaken on disappointment. Or, if the BoJ does inject more liquidity, the yen could, as in the past, weaken in reaction. Upside capped at 134.50, followed by 134.85 and strong resistance at 135.15. Support holds at 133.20, 133.0 and 132.50.  Meanwhile, the dollar will continue to trade hesitantly amid Wall Street whims and Greenspan's key semi-annual testimony to the Congress on Wednesday. Markets will look for any hints that the chairman is becoming more bullish on the prospects for the US recovery and whether the Fed may begin to raise interest rates sometime this year.  	[IMAGE] Audio Mkt. Analysis USD Holds Steady Despite Drop in Stocks       Articles & Ideas  Off Goes the Franc, On Comes Jospin   JPY: Japan's Reform Dilemma       Articles & Ideas Forex Glossary   Economic Indicators   Forex Guides   Link Library      [IMAGE] 	
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