Archived IMT (2011.03.29)

Another S&P downgrade of Portugal & Greece to BBB- and BB- respectively fails to derail EURUSD from its $1.40 support. This is Portugals 2nd downgrade in less than a week, placing it one notch above junk rating, while Greece is further deepened below investment grade. Portugals perceived ability to cover its Q2 redemptions may be countered by deteriorating political stability. Irelands version of the banking stress tests is due on Thursday as the govt moves closer to fully nationalizing the banking sector. USDJPY breaks out of 82 to hit the highest since Mar 11, eyeing next resistance at 82.70. USDJPY weekly suggests 83.50. US job-related figures start tomorrow with the March ADP as well as another speech by non-voting St Louis Feds Bullard. GBPUSD stabilizes right above the $1.5946 support (trendline from 29 Dec 2010) for now. But the pair stands increasingly vulnerable to extending losses towards $1.5840.