Intraday Market Thoughts

Archived IMT (2011.01.10)

by Ashraf Laidi
Jan 10, 2011 23:04

Here is the LATEST CHART ON GE-US 10 year yield differentials. TAKE NOTICE: This is NOT the US-GE differentials but GE-US. The reason I reversed it so that it correlates with EURUSD There is re-emerging talk of the ECB intervening in the market by buying Ezone bonds. Regardless of what the ECB says at Thursdays press conference, the central bank is in no position to exit out of its bond-purchasing program any time soon, which will be at the expense of the German benchmark yields and the single currency. Thus, Ger,an yields will FALL relative to US yields and hence the GE-US spread will fall further below its 200-day MA of about -0.47% (or US-GE spread will rise further ABOVE its 200-DMA of +0.47%). Now that liquidity has returned from holiday doldrums, clarity is improving in FX markets with respect to the highest traded currency pairEURUSD. The pair is now 1.60% below its 200-day MA, the farthest it has been since September. Notably, the last time EURUSD crossed below the 200-day MA to shed similar ground was January 2010. My long-held $1.27 target in EURUSD is now accompanied by a subsequent objective of $1.2350, which could be seen as early as March. As long as no close above $1.32 is seen, has little hope of stabilizing. **** MANY OF THE QUESTIONS YOU HAVE RAISED on Yields differentials & FX, Top-Down Approach to FX & Dissecting USDX Analysis) will be tackled for 8 hours in MY LONDON WORKSHOP on Jan 23. Regsitration details


Latest IMTs