US Trading Preview ,
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echnicals Live Charts Analysis available from: Cornelius Luca   J.P. Chorek=
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   Interest Rates  US: Japan: Eurozone: UK: Switzerland:   1.75%  0.15%  3.=
25%  4.0%  1.25-2.25%        [IMAGE]   =09 [IMAGE]  EUR/USD Collapses to 6-=
Month Low as Dollar Reins Supreme January 25, 7:00 AM: EUR/$..0.8663 $/JPY.=
.134.34 GBP/$..1.4139 $/CHF..1.6976  EUR/USD Collapses to 6-Month Low as Do=
llar Reins Supreme by Jes Black  At10:00:00 AM US Dec Existing Homes (exp 5=
.2 mln, prev 5.21 mln)  The ice finally broke under EUR/USD this morning af=
ter tripping stop loss orders around 87.35 on its way to a 6-month low of 8=
6.70. The euro suffered a one-two punch this week on disappointing remarks =
from ECB president Duisenberg which contrasted with upbeat comments by Fed =
Chairman Greenspan. Markets were pleased by Greenspan's admission that he b=
elieves the worst has past. But players were unenthusiastic by Duisenberg's=
 assertion that interest rates are on hold for the time being and that Germ=
any's rising budget deficit was a further concern. By straight-jacketing Ge=
rmany, the ECB has nearly assured markets that the economy's engine of grow=
th will continue to lag behind the rest of the Eurozone.  EUR/USD has plung=
ed nearly 2.5% since Duisenberg's comments on Wednesday. But the break belo=
w key channel support at 87.40/50 brought about a technical decline to a ne=
w 6-month low of 86.70. Support at 86.80 must now hold to avoid targeting 8=
6.50 on its way to 85.55 the 71.8% Fibonacci retracement of the move from 8=
2.25 to 95.95. Temporary moves higher are not seen by the market as indicat=
ing strength, and are regarded as selling opportunities, dealers say. Follo=
w up support is seen at  87.0 and 86.80. Resistance is viewed at 88.15, 88.=
60 and 89.10-- the 50% Fibonacci retracement of the move from 82.25 to 95.9=
6.  Sterling and the Swiss franc dropped in tandem with the single currency=
 against the dollar after breaking below support at $1.4200 and 1.6775 fran=
cs respectively. EUR/GBP was the only upside to an otherwise tragic day for=
 the single currency as it rose to a 3-week high of 61.21. Across the board=
 sterling weakness sent GBP/USD to a 7-week low of $1.4165 while GBP/JPY fe=
ll 1.5 yen to a day's low of 190.86. GBP/USD also suffered a technical defe=
at today after breaking below 1.4220/00. Support is seen at 1.4160 followed=
 by 1.4113 which marks the 61.8% Fibonacci retracement of last years move f=
rom 1.3680 to 1.4829.  USD/CHF rose to a one-month high of 1.6937 and now f=
aces resistance at the December 26 reaction high of 1.6945. A move beyond 1=
.6945, which marks the 50% Fibonacci retracement of last year's July high o=
f 1.8221 to the September low of 1.5670, will be key for further gains in S=
wissy. Support is seen at 1.6880 and 1.6840.  USD/JPY also rose to a new 39=
-month high of 134.93 in Tokyo trade as falls in the yen have lead to asset=
 sales by foreigners which has lead to a vicious cycle of further yen weakn=
ess. Moreover, fears that Japan's sovereign-debt rating will soon be downgr=
aded has convinced most dealers that there is further weakness in store for=
 JPY. Resistance is seen at 135.00 followed by 135.40 and 136.00. Support i=
s seen at 134.50 and 133.80.  The fundamentals behind today's move reflect =
growing optimism about a turnaround in the US economy. Thursday's testimony=
 by Fed Chairman Greenspan showed a rare admission of error in his previous=
ly downbeat assessment of the economy. Greenspan said that the forces restr=
aining the US economy are diminishing and activity is beginning to firm. Bu=
t he also projected that the US is close to zero GDP growth and that there =
will need to be signs of business investment and strong consumer demand for=
 the recovery to gather momentum.   The only domestic economic release of n=
ote today is the National Association of Realtors' existing home sales repo=
rt, which is expected to show that housing activity weakened slightly by 0.=
1% in December to bring the total to 5.2 mln from 5.21.  Today's earnings a=
nnouncements are not as heavy as the past two days and include Ericsson LM =
Telephone and Lockheed Martin.     =09[IMAGE] Audio Mkt. Analysis Markets R=
ally as Greenspan Clarifies Outlook        Articles & Ideas  ECB: One More =
Cut    NAM & the Strong Dollar: Phase II       Articles & Ideas Forex Gloss=
ary   Economic Indicators   Forex Guides   Link Library      [IMAGE]  =09
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n. =09
sara.shackleton@enron.com