Intraday Market Thoughts

Archived IMT (2010.08.16)

by Ashraf Laidi
Aug 16, 2010 11:08

JPY CHF USD BALANCE OF POWER is being dominated by the Swiss franc as Japans Q2 GDP slows to 0.1% from 1.1%. Despite the news, JPY is second best performer of the day as Asian/European bourses remain in negative territory, while S&P500 watchers await whether the index further drops below its 55-day MA (1087) instead of regaining its 200-day MA (1115). CHF builds on last weeks advances as yen scrutiny slows the pace of gains and QE anticipation from the Fed places USD strength in focus. While SNB intervention cannot be ruled out, Switzerland is neither involved in QE or on the verge of a growth contraction. thus giving CHF plenty of room for fresh gains and any CHF selling by the SNB will have a limited effect. I focused on EURCHF last week with the bottom right chart in the link following chart at the break of the 1.36 trendline. 400 pips later, I call for cautiousness as we near the 1.3260 territory, with SNB-led rebounds seen capped at 1.35. EURUSD falling resistance to $1.2870s, suggests fresh selling around these levels in the event of a break of $1.2830s.


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