Intraday Market Thoughts Archives

EURUSD shatters the 200 and 55 DMAs in a matter of 3 days, and appears to be returning towards our 1.35 target slightly earlier than anticipated (considering this weeks short-term Premium Insights). 6 trades from the Premium Insights hit all targets, 2 were stopped out, 4 remain in progress and 3 were unfilled. 1 EURUSD short stopped out, while the long was unfilled. USDJPY in progress. Both GBPUSD hit all targets (two weeks in a row both cable longs hit their targets). AUDUSD long was unfilled (missed by 20 pips). 1 EURJPY long hit all targets, the other was unfilled. CADJPY long remains in progress, while both EURGBP finally hit all targets, which were in progress since Nov 14. One gold short stopped out, the other a new contingency long was filled and in progress. The long silver trade since Nov 7 finally hit its highest target of 33.90. The lone long in oil is in progress. For DIRECT ACCESS to these trades and the relevant charts, click here: http://ashraflaidi.com/products/sub01/access/?a=695 NonSubscribers Can click here to join: http://ashraflaidi.com/products/

EU summit continues; German Ifo improves; UK mortgage approvals rose; Spain already prefunding 2013. See below for latest Premium Insights.

The EU economic summit in Brussels continues today. Market participants still assume that the long term EU budget deal will be reached today but there was chatter that German chancellor Merkel suggested that she doubted an agreement would be reached today.

The common currency pushed higher after all the November Ifo results were above expectations and better than in October. The business climate rose to 101.4 from October's 100.0; the current assessment improved to 108.1 from 107.2 and the expectations sub index increased to 95.2 from 93.2. The final reading of German Q3 GDP was unrevised at 0.2% q/q and 0.4% y/y. EURUSD rose back above 1.29 and EURGBP moved nearly to 0.81.

In other news, UK mortgage approvals rose to 33K in October from previous 31.5K and S&P downgraded three Spanish banks and said that negative outlooks on banks reflects the likelihood of further sovereign downgrade.

According to MNI, EZ sovereign issuance so far this year totaled EUR 797.23 bln which is around 99.7% of the total needs. Belgium, Slovakia and Spain are now pre-funding for 2013.

The sole item on the data calendar for the US session is Canadian CPI that is due at 8:30 am ET and that is expected to slow to 1.0% in October from previous 1.2% on annual basis. Core inflation is seen at 1.2% from 1.3% y/y. Liquidity will be thin as US firms are operating on skeleton staff after yesterday's Thanksgiving holidays.

Watch our insights on EURJPY and CADJPY as well as GBPUSD, gold, silver and the 2 new trades in oil. Direct Access to these trades is found here: http://ashraflaidi.com/products/sub01/access/?a=695 NonSubscribers Can click here to join: http://ashraflaidi.com/products/

EUR/USD required a convincing catalyst to lift it back above its important 200-DMA of 1.2820. And it did . Chinas HSBC flash PMI hit a 13-month high and Eurozone flash November services/manufacturing PMIs showed some signs of stability, thus enabling EUR pairs to move in tandem with rising equities. See the EURJPY charts here: http://www.cityindex.co.uk/market-analysis/market-news/2611202012/revisiting-eurjpy-technicals-fundamentals/

EU summit continues; German Ifo improves; UK mortgage approvals rose; Spain already prefunding 2013. See below for latest Premium Insights.

The EU economic summit in Brussels continues today. Market participants still assume that the long term EU budget deal will be reached today but there was chatter that German chancellor Merkel suggested that she doubted an agreement would be reached today.

The common currency pushed higher after all the November Ifo results were above expectations and better than in October. The business climate rose to 101.4 from October's 100.0; the current assessment improved to 108.1 from 107.2 and the expectations sub index increased to 95.2 from 93.2. The final reading of German Q3 GDP was unrevised at 0.2% q/q and 0.4% y/y. EURUSD rose back above 1.29 and EURGBP moved nearly to 0.81.

In other news, UK mortgage approvals rose to 33K in October from previous 31.5K and S&P downgraded three Spanish banks and said that negative outlooks on banks reflects the likelihood of further sovereign downgrade.

According to MNI, EZ sovereign issuance so far this year totaled EUR 797.23 bln which is around 99.7% of the total needs. Belgium, Slovakia and Spain are now pre-funding for 2013.

The sole item on the data calendar for the US session is Canadian CPI that is due at 8:30 am ET and that is expected to slow to 1.0% in October from previous 1.2% on annual basis. Core inflation is seen at 1.2% from 1.3% y/y. Liquidity will be thin as US firms are operating on skeleton staff after yesterday's Thanksgiving holidays.

watch our insights on EURJPY and CADJPY as well as GBPUSD, gold, silver and the 2 new trades in oil. Direct Access to these trades is found here: http://ashraflaidi.com/products/sub01/access/?a=695 NonSubscribers Can click here to join: http://ashraflaidi.com/products/

MidEast Ceasefire, Onto China PMI, New Premium InsightsA ceasefire in the Israel-Palestine conflict along with better US economic data boosted sentiment in US trading. The pound was the best performer while the yen tumbled to fresh six month lows. The main release on the Asia-Pacific calendar is the China flash PMI. Latest Premium Insights Preview China PMI, Eurozone Flash PMIs with 2 charts on CADJPY and EURJPY. See more below.

Egypt brokered a ceasefire agreement between Israel and Hamas on Wednesday, raising hopes for a lasting peace. Market watchers are skeptical and the price of oil remained higher after a brief dip.

Overall risk sentiment was better as US traders headed out for the Thanksgiving holiday. Initial jobless claims fell to 410K which was in line with expectations. The prior week was skewed higher by Hurricane Sandy.

The Markit US manufacturing PMI also raised hopes as it climbed to 52.4 compared to the 51.0 consensus. One negative surprise was the final revision to the U of Michigan consumer sentiment survey, down to 82.7 from 84.9. It was still the best reading since the crisis.

The market is fixated on the yen as more skeptics become believers that the turn in the yen is finally here. That might be true but for the moment, yen crosses are beginning to look stretched. GBP/JPY has climbed for six straight days, gaining nearly 550 pips.

The key to sentiment in the day ahead is the HSBC China flash PMI. There is no consensus estimate but the prior reading was 49.5.

It remains unclear if Chinese growth has begun to accelerate once again. On Wednesday, a top executive at mining giant Vale warned that Chinese growth is slowing.

New dual trades on EURUSD, with insights on EURJPY, AUDUSD, USDJPY, gold and oil. Direct access todays Premium Insights is found here: http://ashraflaidi.com/products/sub01/access/?a=695 Non-subscribers can join here: http://ashraflaidi.com/products/sub01/

-AB

No decision from Eurogroup, next meeting on 11/26; MPC voted 9:0 on rates and 8:1 on QE; German auction. Market turns to jobless claims, Markit manufacturing PMI and UoM consumer confidence revision.Due to technicals issues we had been unable to post the latest Premium Insights. These will be out later this afternoon. Please see below the triple charts on USDJPY from last week's Premium making the case for the bullish side.

The common currency dropped nearly 90 points during the Asian session after yet another Eurogroup meeting ended with no agreement on Greek aid. EZ finance ministers will meet again on Monday 11/26. Even though the Eurogroup head J. C. Juncker attempted to calm the markets by saying that the meeting was only interrupted to allow more technical work, German finance minister Schaeuble said there was no agreement among the finance ministers. Nevertheless, EURUSD recovered from 1.2735 to 1.2800

The minutes from the latest MPC meeting revealed unanimous voting to keep rates on hold at 0.5% but a 8:1 split regarding QE. Only David Miles voted for GBP 25 bln in further easing. The MPC noted that it is unlikely to cut the Bank rate in the foreseeable future. Public sector net borrowing declined in October to GBP 6.5 bln from September's GBP 9.9 bln. GBPUSD trades around 1.5910 which is about 20 points below session high.

The JPY continues to decline on anticipation of more aggressive monetary easing. The reported barrier at 82.00 was broken and the pair currently trades around 82.25

Germany allotted EUR 3.253 bln of 10 year bund vs. EUR 4 bln target. The average yield declined to 1.4% vs. previous 1.56% and cover was unchanged at 1.5.

Because of the tomorrow's Thanksgiving holidays, jobless claims will be published today at 8:30 am ET. They are seen at 415K after soaring to 439K the week earlier. Markit manufacturing PMI comes at 9:00 am and it is anticipated to rise slightly in November to 51.2 from 51.0 and finally the university of Michigan consumer sentiment is due at 9:55 am and it is expected to be revised lower to 84.3 from the initial estimate 84.9.

Due to technicals issues we had been unable to post the latest Premium Insights. These will be out later this afternoon. Please see here the triple charts on USDJPY from last week's Premium making the case for the bullish side. http://www.ashraflaidi.com/content/images/p_sub01/USDJPY%20W%20M%20Q%20Nov%2014%202012.jpg_640W.gif

Chairman Bernanke didnt offer any clear signals about what the Fed will do when Operation Twist expires at year end, leaving the market disappointed. The pound was the days best performer while NZD and AUD lagged. Eurozone ministers continue a meeting in Brussels on Greece. A new Premium Insights edition will be released in 2 hrs from now.

The market was expecting a hint at what Bernanke would do to replace the long-term Treasury buying from Operation Twist but he was mum in his speech. He spoke about the potential economic consequences of the fiscal cliff and said unemployment was 2-2.5 percentage points above potential.

The employment comment was slightly dovish but the stock market slipped afterwards. The forex was relatively involatile throughout US trading with the euro stuck in a 1.2784-1.2810 range.

USD/JPY strengthened to a marginal fresh 7-month high at 81.76 as LDP leader Abe continued to pledge more extreme monetary policy if he wins the election.

Housing remains the bright spot in the US economy as starts jumped to their highest since 2008. The pace of 894K was much higher than 840K expected.

The focus remains on Eurozone meetings as officials try to hammer out a sustainable deal for Greece. Midday headlines suggested interest on official loans to Greece could be cut to 0.25%.

The calendar highlights include the Australian Sept leading index at 2330 GMT and Japanese October trade data 20 minutes later. At 0500 GMT, Japan will publish its November economic report.

-AB

Markets are shrugging Bernankes speech to the NY Economic Club where he appeared to maintain the status quo over asset purchases. http://www.cityindex.co.uk/market-analysis/market-news/2520662012/shrugging-bernanke-on-eu-imf-impasse/

French downgrade; EZ finance ministers meeting; no changes from BOJ; German PPI lower; Spanish auction. Real estate market data and Lacker and Bernanke speeches ahead. Bernankes speech at the NY Econ Club will be of particular importance as these annual appearances are known to cause volatility. 5 longs from last week's Premium Insights hit all targets, including both EURUSD trades.

EURUSD faces a confluence of resistance at 1.2820s 200-DMA (previous support now a resistance) and trendline resistance from Oct 17. The common currency continues to trade around 1.28 despite the downgrade by Moody's that cut French AAA rating one notch to Aaa1 with negative outlook. The downgrade is likely to affect EFSF/ESM rating as well.

Markets are awaiting a decision from the Eurozone finance ministers who are meeting in Brussels to determine the release of the next tranche of Greek aid.

USDJPY slipped slightly to 81.15 after the BOJ left rates unchanged between 0-0.1% and did not announce any new easing. Focus turns to the election on 12/16 and the next BOJ meeting on 12/19 when new easing is likely. USDJPY recovered the losses and trades around 81.40.

In other news, German PPI was flat in October m/m but the annual print slowed to 1.5% from 1.7% and Spain sold 12 and 18 month bonds worth EUR 4.94 bln, above its EUR 3.5-4.5 bln target.

The US session kicks off at 8:30 am ET with building permits that are expected to decline in October to 0.87M from previous 0.89M while housing starts are anticipated to fall to 0.84M from 0.87M.

Markets will also focus on the Richmond FED president and the FOMC member Jeffrey Lacker's speech on monetary policy that begins at 9:00 am and especially on the FED chairman Bernanke's speech on economic recovery and policy that is scheduled to begin at 12:15 pm. Audience questions are expected so the volatility could heighten even after the speech has concluded.

5 longs from last week's Premium Insights hit all targets, including both EURUSD trades. 3 trades were stopped out as final targets were missed by 10-15 pips. Find out the rationale of these trading ideas and understand the breakdown of multi-time frame stochastic analysis. Direct access to the latest Premium Insights is found here: http://ashraflaidi.com/products/sub01/access/?a=694 Non- subscribers can have a free trial here: http://ashraflaidi.com/products/sub01/

The euro climbed above 1.28 as risk trades rallied on Monday in US trading. The commodity currencies were the top performers while the US dollar lagged. The minutes of the November RBA meeting are the highlight of the upcoming session. 5 longs from last week's Premium Insights hit all targets, including both EURUSD trades.

Positive risk sentiment broadly weighed on the US dollar, boosting the euro through the 200-day moving average, albeit marginally. It’s the first time above the 200dma since the pair broke down on Nov 1.

Hopes for a solution to the fiscal cliff and a further bailout for Greece were the main drivers but upbeat housing numbers added to the momentum.

The NAHB housing market index climbed to 46 compared to 41 expected. It was the best reading since May 2006. Existing home sales were also slightly ahead of forecast at 4.79m, although the National Association of Realtors warned that Nov and Dec sales could be skewed by the hurricane.

European leaders are meeting in Brussels on Tuesday on Greece. Dow Jones reports that Greece has rejected a Troika request for 20,000 additional public sector job cuts. At the moment, optimism about a Greek deal is high but that could change in an instant. Even if the funds are dispersed, any troubles in Spain could trigger risk aversion.

In Asian trading, the focus will be on the RBA as the minutes of the Nov meeting are released at 0030 GMT. The market is undecided about a Dec rate cut because the Nov statement was non-committal. A clearer indication in the minutes would swing the market (and the AUD) strongly in one way or the other.

The BOJ also starts its two day meeting as policies continue to stoke the fires of more activist policies to defeat deflation and the strong yen.

5 longs from last week's Premium Insights hit all targets, including both EURUSD trades. 3 trades were stopped out as final targets were missed by 10-15 pips. Find out the rationale of these trading ideas and understand the breakdown of multi-time frame stochastic analysis. Direct access to the latest PremIum Insights is found here: http://ashraflaidi.com/products/sub01/access/?a=694 Non- subscribers can have a free trial here: http://ashraflaidi.com/products/sub01/

-AB

EURUSD starts week on a firm note, attempting to post 2 winning weeks in a row after 3 straight weekly losses. While the foundation remains underpinned above 1.2650 (100-day moving average), upside is ... Click here for full analysis. http://www.cityindex.co.uk/market-analysis/market-news/2465142012/euro-awaits-greece-resolution-ifo/

Riskier assets gain; JPY retraces gains ahead of BOJ; Italian industrial orders fell. Market awaits existing home sales. Remaining Premium longs for EURUSD await final target at 1.2840. Premium we posted below the 2 charts for cable to explain the rationale for the latest Premium positions, 1 of which hit all targets. Also, 1 of 2 USDJPY Premium Insights and the remaining CADJPY hit all targets. The 3 charts on USDJPY cover more ground on the pair. See more below.

The current trading week that is shorter due to the upcoming Thanksgiving holidays started on a positive note. Risk trades were pushing higher during Asia and throughout the London session. European equities are gaining over 1% and the relative strength winner is NZD while USD is the weakest.

Friday's optimistic comments on the progress regarding the fiscal cliff along with chatter that Greece will be given the next tranche of aid at tomorrow's Eurogroup meeting underpinned the riskier assets. However, the uncertainty that comes from the ongoing tensions in the middle ease could easily change the whole market sentiment around.

USDJPY is losing a portion of its recent gains ahead of tomorrow's BOJ decision as it trades around 81.15. New easing seems more likely to be announced at the following BOJ meeting on December 19th after the election in mid December than tomorrow. Further retracement therefore seems likely. Key short term support is around 80.40.

Italian industrial orders fell sharply in September by 4.2% after growing 2.7% in August. On annual basis the third largest economy of the Eurozone lost 12.8% of orders. EURUSD trades around 1.2770.

The sole item on the US data calendar is existing home sales that are expected to rise marginally to 4.76M in October from previous 4.75M.

1 of 2 Premium cable longs hit all targets. Here are the 2 cable charts used to help explain the rationale http://www.ashraflaidi.com/content/images/p_sub01/GBPUSD%20D%20W%20%20Nov%2014%20Oct%2012.jpg_640W.gif The piece also focuses on the timing of the new and existing EURUSD insights as well as new gold, and GBPUSD ideas. Direct Access to today's Premium Insights is found here: http://ashraflaidi.com/products/sub01/access/?a=694 Non- subscribers can have a free trial here: http://ashraflaidi.com/products/sub01/

The fiscal cliff is the dominant theme in markets but signs are beginning to emerge of a compromise. Last week, the Swiss franc was the top performer while the yen lagged badly. CFTC weekly positioning data showed a fresh wave of euro shorts. The 2 Premium charts on cable explain the reason why 2 longs are in progress, 1 of which is nearing the final target. 1 of 2 USDJPY Premium Insights and the remaining CADJPY hit all targets. The 3 charts on USDJPY cover more ground on the pair. See more below.

On Friday, a WSJ story suggested the White House was in talks to replace the year-end spending sequester. Later, Republican leaders put tax hikes on the table as part of a deal, or at least a short-term deal.

The reports boosted sentiment, sparking turnarounds in the commodity currencies. USD/CAD hit a three-month high at 1.0056 before reversing

back to parity. AUD/USD tripped stops below 1.03 and then climbed to 1.0350. The S&P 500 gained 0.5%

USD/JPY was the focus of the week as it rallied despite the risk off tone. Japanese elections were the trigger for the move but market participants have been waiting for opportunities to buy USD/JPY for months. They have been burned many times before so the patient money may wait for definitive signs.

One of those signs could come on a break above 81.50. That level capped trading on Thursday and Friday and is also the 61.8% retracement of the March-Sept selloff. A break points to an eventual re-test of 84.00.

CFTC Commitments of Traders

The weekly data on speculative positioning showed a renewed emphasis on euro shorts. The June cycle low was -211K so there is still plenty of room on the downside. Yen shorts covered but likely jumped back in late in the week.

EUR -84K vs -67K prior

JPY -30K vs -40K prior

GBP +8K vs +19K prior

AUD +68K vs +60K prior

CAD +66K vs +75K prior

NZD +19K vs +19K prior

The data is collected at the close on Tuesday.

Gold survived one of the 2 stop and is nearing the 1700 figure. The 2 Premium charts on cable explain the reason why 2 longs are in progress, 1 of which is nearing the final target. 5 new charts were added to last nights Premium Insights, including quarterly chart of USDJPY. Timing the new and existing EURUSD insights as well as new GBPUSD ideas. Direct Access to today's Premium Insights is found here: http://ashraflaidi.com/products/sub01/access/?a=694 Non- subscribers can have a free trial here: http://ashraflaidi.com/products/sub01/

-AB