Intraday Market Thoughts

Archived IMT (2010.08.04)

by Ashraf Laidi
Aug 4, 2010 15:06

STOCKS EXTEND FRESH DOSAGE of pre-payrolls buying after US July ISM unexpectedly rises to 54.3 from 53.8; S&P500 will attempt to close above its 10-day MA of 1126 (not broken since May). AUSSIE & LOONIE SOAR against all currencies as wheat extends its 55% rally of the past 4 weeks amid worsening draught in Russia. Aussies leadership is also boosted by the prolonged strength in energy and metals as the Federal Reserve opens the door for the possibility of renewed asset purchases (quantitative easing). QE is becoming synonymous with rallying commodities as was the case in Q1-Q3 2009. Copper nears the key $7,570 resistance, which is the 76% retracement of the decline from the April high to the June low. US crude has the technical momentum required to break above $83.50 (right shoulder), especially if the skirmishes in the Middle East show no abating. And with the FOMC widely expected to confirm its bearishness at next weeks rate decision, AUDUSD eyes 0.9230-35 as the next barrier. Any dovishness from the RBA in Thursdays quarterly monetary policy statement may have a limited impact ahead of next weeks FOMC. AUDJPY is the more likely loser in the even of disappointing US payrolls. USDCAD resistance drops from 1,0320 to 1.0270s eyeing 1.0170s.


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