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]  USD Eases Off JPY, But Hit=
s New 6-Month High vs Euro  February 1, 7:00 AM: EUR/$..0.8605 $/JPY..133.9=
2 GBP/$..1.4100 $/CHF..1.7165  USD Eases Off JPY, But Hits New 6-Month High=
 vs Euro by Jes Black  At 8:30:00 AM US Jan Avg Hourly Earn. (exp 0.2%, pre=
v 0.5%) US Jan Payroll Employ. (exp -27k, prev -124k) US Jan Unemployment (=
exp 5.9%, prev 5.8%) At 9:45:00 AM US Jan Univ of Michigan Sent. Final  (ex=
p 94.3, prev 88.8) At 10:00 AM US Jan PMI (exp 49.4, prev 48.2)  USD/JPY ma=
intained above 133.80 in European trade as the dollar whipsawed against the=
 European majors, first higher then back again. The dollar retraced part of=
 an overnight 2.5 yen surge to a fresh 40-month high of 1356.15, but found =
support above 133.60, which marks the 61.8% retracement of the rally. Meanw=
hile, favorable European manufacturing data helped the euro off a fresh 6-m=
onth low of 85.64 but trade steadied soon afterwards as dealers are now loo=
king to the final leg of a key US data week for direction. Markets will wat=
ch to see if the US economy can retain its positive outlook ahead of the Ja=
nuary US employment report, PMI data and the University of Michigan consume=
r sentiment survey.  Traders are expecting further improvement in today's d=
ata after US economic indicators have turned sharply positive. Most notably=
 this week was the astonishing 0.2% rise in 4Q01 GDP. While the market was =
looking for a decline of around 1%, it again underestimated the ability of =
US consumers to shop -- even in a recession. In fact, the incredible 5.4% a=
nnualized rise in consumer was a recession spending record, just edging out=
 the 5.1% rise in 2Q60.  Given the tumultuous week on Wall Street, dealers =
will still look to movements there for direction. Today's futures are down =
15 points on the Dow and 4 on the Nasdaq. Today's earnings announcements ar=
e light, with only a handful of companies reporting. Therefore, the market =
will react more to today's economic data.  First on today's list is the job=
s report for January which is expected to shed a mere 27k after last months=
 124k loss. This would be a marked improvement reflecting the improving tre=
nd in jobless claims in recent weeks.   Then comes the final revision to th=
e University of Michigan's confidence survey. The headline figure is expect=
ed to stay steady at 94.3 in January, up from the previous 88.8. However, i=
t is not anticipated to generate waves in FX markets, as forecasts call for=
 the final January reading to remain virtually unchanged at 94.3.   More im=
portant will be the ISM (formerly NAPM) Purchasing Managers Index as it loo=
ks poised to jump to 49.4 in January from the previous 48.2, possibly even =
breaching the key 50-level which marks expansion/contraction.  On Thursday,=
 the Chicago PMI rose to 45.1 in January from the previous 41.5. Regional m=
anufacturing was boosted as the production component broke above the key 50=
-level for the first time since December 2000 into expansionary territory t=
o 50.4 in January. Nevertheless, this month's reading marked the 18th month=
 the manufacturing sector has been in contraction.   This compared to the r=
elatively light manufacturing recession going on in Europe. Today's PMI fig=
ures also showed a good recovery with UK PMI rising to 46.2 in January from=
 45.2 the eleventh consecutive decline. Eurozone PMI also rose to a high of=
 46.2 in January from 44.1. Although the figure still marked a tenth month =
of contraction, markets were optimistic that the euro area would follow the=
 US out of a recession.   Meanwhile, traders will also be monitoring this w=
eek's World Economic Forum in New York and next week's G7 meeting in Toront=
o for any dollar policy rhetoric in light of the recent complaints about th=
e strong dollar by manufacturers.  However, the dollar is not likely to com=
e under pressure after yesterday's remarks by Treasury Secretary O'Neill th=
at he had no sympathy for complaints by US manufacturers about the strong d=
ollar because good companies do not "live and die" by exchange rates. Furth=
ermore, he said that the current account balance is an "artifact", or an ou=
tdated way of looking at the economy, countering arguments that the dollar =
is overvalued because of the imbalance in the US current account.  EUR/USD =
rose to a day's high of 86-cents following the better than expected PMI dat=
a. But the downside risks have increased after the pair breached former sup=
port at 85.75 to hit a new 6-month low of 85.65. The euro was not helped by=
 the jump in January euro area inflation to 2.5% as expected. Now, the pair=
 risks closing below support at 86 cents after failing to hold onto gains a=
bove 86.30 overnight. Moreover, the single currency would need to regain th=
e 86.80/90 mark to really improve its outlook. Resistance is viewed at 86.8=
0, and the key 87.40/50 level which marks the 61.8% Fibonacci retracement o=
f the move from 82.25 to 95.95. A break of 85.60/70 is seen calling upon su=
pport at 85.0 and 84.50, which marks the long-term trendline support extend=
ing from its 82.25 lows.   GBP/USD fell to a day's low of 1.4063, after ste=
rling dropped from a day's high of 60.72 pence to the euro to a 61 pence lo=
w. The rise in EUR/GBP put sterling under pressure to below Thursday's low =
of $1.4085. Support is seen at this week's 6-month lows around 1.4040. Resi=
stance at 1.4183, which marks the 38.2% Fibonacci retracement of the 1.4418=
-1.4038 move, has held so far. Barring a break of this resistance, renewed =
weakness could prevail.  USD/CHF rose to a 6-month high of 1.7232 before pa=
ring gains back to support around 1.7150. Follow up support is seen at 1.70=
60 and 1.6945, the 50% retracement of the 1.8220 to 1.5770 move. Also keepi=
ng pressure on the franc was the Swiss KoF indicator which fell to -1.37 in=
 December from -1.28, marking a worsening of conditions, not a turnaround a=
s many had hoped. Therefore, given the recent bullish data and positive out=
look by the Fed, USD/CHF should remain well supported.  =09[IMAGE] Audio Mk=
t. Analysis Yen Battered Across the Board       Articles & Ideas  USD/JPY: =
ONeill, Koizumi and January Effect    Fed Moves On, Dollar Moves Up       A=
rticles & Ideas Forex Glossary   Economic Indicators   Forex Guides   Link =
Library      [IMAGE] =09
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