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To: X Y Zebra who wrote (53032)	5/20/2002 6:02:04 PM
From: X Y Zebra	Respond to of 208838

May 20, 4:00 PM: EUR/$..0.9212 $/JPY..125.25 GBP/$..1.4586 $/CHF..1.5762 Yen Hammers Dollar, Cheney's Warning Weighs on Sentiment by Ashraf Laidi US Vice President Dick Cheneys' statement yesterday warning of an imminent terrorist attack on US soil acted as the primary catalyst to the sell-off in US assets today, prompting the US dollar to fresh lows for the year and lifting gold prices to their highest level in 2 years. While some Western European markets closed for a holiday, traders were preoccupied with resurfacing event risk in the US combined with new economic data casting fresh doubts on the strength of the US recovery. The US Leading Indicators Index fell 0.4% in April (expected -0.3%, previous 0.1%) showing its first decline since September. The Japanese yen was the primary gainer in today's trading escalating to a fresh 5-month high against the dollar at 125.20, breaching under the 125.32 support--50% retracement of the rise form the 115.75 low (Sep 2001) to the 135.15 high (Feb 02). A breach below this point will test the key psychological figure of 125 near which Japanese authorities are expected to step up their interventionist rhetoric and may even convert it with actual action. Medium term support seen at 123, which is the previous resistance neat the Oct 26 high and the support from last June to August. Such momentum in the yen shall only be reversed from actual intervention in the market by the Japanese authorities rather than verbal jawboning as had been the case so far. Upside potential seen facing pressure at 125.80 followed by 126.20. Traders will await the upcoming Japanese trading session, to watch for any signs of escalation in rhetoric from government officials expressing concern with the soaring yen. The Japanese currency's gains were rather notable as EUR/JPY shows its second daily consecutive drop from Friday's 116.90 high to today's 115.34 low--lowest since May 02. GBP/JPY fell 2% in Friday, and hit today a 9-week low at 182.98. The latest data from the CFTC IMM report showed that speculators were net long 2814 yen contracts in the week ending on May 14, falling from last week's high of 6514 contracts. Although net long yen contracts were lower than the previous two weeks speculators remained markedly bullish on the Japanese currency. forexnews.com