U.S. Market January 9, 2001

The attention shifted to usd/jpy in New York trading today, with the long term 117.25 technical level offering major backstop to any break higher. Despite small stops loss buying on the break of 116.50, sell orders at the 116.75 area quickly dampened the up move. But, with the economic and financial pictures refusing to brighten in Japan, 116.50 should be the focus of new support moving into the Tokyo market. Eur/usd turned to further consolidation with new shorts and old longs selling for different reasons. Newer shorts take the view that with the recent highs moving slowly away, and the overall economic picture unchanged, the market has few reasons to expect dramatic movement above 0.9600. In addition, though the up trend remains intact, a coherent support level has not been established by repeated downside testing and the market will likely to continue to probe until it finds such support. Medium to long term holders of euros can simply take the pragmatic view that most profits are better than some, with the short term selling risk clearly outweighing the appetite needed for the push to parity.

www.nicorp.org