Archived IMT (2009.08.25)

Broadening advances in the USD resulting from better than expected US consumer confidence are now accompanied by gradual gains in JPY. While many pundits are now heralding the change Forex dynamics regarding USD strength during good news, we maintain that data strength is mainly USD-positive when the US consumer is involved due to its significant role in stabilizing the US economy. As USD strength strengthens the resistance in oil prices (200-week MA 74.65), commodities tend to follow suit and equities show more signs of a struggle. Expect broadening CAD strength, with USDCAD eyeing 1.0875-80, CADJPY at 86.80 and AUDJPY at an interim support of 77.80. Ashraf is on holiday so frequency of updates is less than normal.