Intraday Market Thoughts Archives

USD paring gains after the 103K rise in NFP came in less than the revised forecasts of +170K-350K, but the 9.4% unemployment rate was the lowest since May 2009. Taking a step back and keeping out the noise from those somewhat excessively bullish forecasts, the December US jobs report is a positive for the yield and growth implications of the US dollar. The bullish case for the US dollar REMAINS BEST ARGUED AGAINST THE EURO, with the $1.27 target now becoming a preliminary objective, before $1.23 is set as the subsequent target. CANADA JOBS continued to grow as payrolls +22K from 17.5K with the unemp. rate falling to 7.6% from 7.7%. EURCAD seen extending losses towards 1.2770 as the collapse continues from the Nov high in this chart http://ashraflaidi.com/hot-chart/?a=1988

SEATS ARE GOING FAST FOR MY January 23 course in London. The last full-day course I did was in March 2010. If you truly care about understanding the core dynamics of FX markets; if your priority is to grasp the main currents underpinning currency, commodities, equity indices and bond yields for your FX trading then this course is for you. If you want to figure out what markets will do in the next 20 minutes, then this is NOT for you. If you need to STAY AHEAD of market volatility and DISTINGUISH THE NOISE FROM THE TREND as well increase your trading confidence, then I will be seeing you in London. I have demonstrated to my readers (website, twitter, youtube & TV interviews) that my intermarket/technical approach to FX DOES WORK for daytraders and position traders-- both technical and fundamental ones. Check out the archive section of my website for an idea of my trading calls. You will not need more than 10 mins to conclude that following my insights and alerts gives you the advantage to stay ahead rather than follow the pack. It is up to you to make this decision. And of course, there is a reason why I placed 4th out of +500 people in last year's Twitter Awards (placing behind 2 popular TV show hosts & a fully staffed website) . MY LONDON COURSE IS is $449.00 (GBP 290.00) for a full day with me and fellow attendees. There will be lunch, refreshments and no recording. See you in London. CLICK HERE FOR DETAILS:

http://www.ashraflaidi.com/products/workshop01/

My Video Market Analysis Previewing NFP, USDJPY, GBPUSD, EURUSD , gold and more http://youtu.be/CaZPQ-IofSA

SHORTY AWARDS:

If you would like to vote for me at this year's SHORTYAWARDS, please go to the link http://shortyawards.com/alaidi and fill in the sentence in the box stating the reason why you would nominate me. Please make sure you state a reason before you click Tweet your vote. THANS TO YOU that last year I placed 4th out of +500 in the finance category. http://shortyawards.com/alaidi

EURO DEEPENS SELLOFF, partly on overall USD strength but mainly on resurging Eurozone debt worries on 1) Portugal's announcement to issue EUR 750 mln and EUR 1.25 bln in 2 bonds maturities next week and 2) EUs pressing ahead with its plan to spread the burden of EU bank failures to senior bondholders ie haircuts and that no bank is too big to fail. The fact that the ECB is also pushing for this idea (that bank bond holders should take a loss) is surprising because the central bank opposed the idea of sovereign bond holders taking haircuts. That is the reason to the 20-bp jump in Portuguese bond spreads to 4-week highs. EURUSD DEEPENS BREAK BELOW 200-day MA eyeing 1.2978. I said on Monday EURUSD needed to close the week above the $1.3460s ie the 55-week MA in order to invalidate the downtrend. This has not happened and the bearishness remains and so does my prelim outlook for $1.27. Meanwhile, some pvt economists expect NFP tomorrow to exceed 300k, w/ some saying 450K. I will post my Video Mkt Analysis shortly. ****** SHORTY AWARDS: If you would like to vote for me for this years SHORTYAWARDS, please go to the link http://shortyawards.com/alaidi and fill in the sentence in the box stating the reason why you would nominate me. Please make sure you state a reason before you click Tweet your vote. THANKS FOR YOUR SUPPORT. THANS TO YOU that last year I placed 4th out of +500 in the finance category. http://shortyawards.com/alaidi

STERLING sheds a full cent after UK Dec services PMI unexpectedly contracted (49.7 from 53) for the first time since April 2009. This comes a day after UK construction contracted for the 1st time since February 2010. Recall sterling was the strongest performer on Tuesday following 16-year highs in manufacturing PMI. But with these two contractions in construction and services as well as the general stabilization in USD, traders may regain confidence in expecting $1.5270s. Note that despite GBPUSD recent recovery, the pair failed has failed three times to break above its trendline resistance extending from the Nov 4 high. $1.5660-70s was the required breakbut it failed. Traders now set their sights to the 200-day MA at $1.5412, followed by $1.5350s and the $1.5270 target projected in this Dec 15 chart http://chart.ly/yn4xak3

My video for Reuters Thomson on $AUDCAD before the 80-pip drop. The technical and fundamental rationale for more downside ahead in this commodity-driven pair http://bit.ly/i7NCjs

MANY HAVE THEIR OWN REASONS for why stocks may be facing a pullback soon. Readers of my website and my book Currency Trading & Intermarket Analysis are familiar with the use of the Gold/Oil Ratio and its inverse relationship with global equity indices. Weekly and daily technicals in the Gold/Oil ratio indicate a bottoming process, a pattern of which has triggered broad selloff in equities. I am expecting a pullback of 3-5% in the S&P500, revisiting the previous top at 1,230. This is likely to translate into an extended decline in EURUSD towards $1.3050 and a retreat in AUDUSD towards 0.9770. Tehnically speaking, none of the major equity indices show any notable arguments for a pullback. But the intermarket argument from the 2 major commodities suggest a selloff of at least 3-5% is overdue.

My CNBC interview on the euro's 12-year anniversary with Erin Burnett.

http://stk.ly/hnbhgB

I will be on CNBC at 14:15 ET, 19:15 GMT with Erin Burnett discussing the euro

STERLING IS THE TOP performer of the day after UK Dec manuf PMI hit 16 year highs at 48.3 from 57.5, lifting cable back above the $1.56 for the second day over the past 2 weeks. $1.5680 stands as the trendline resistance from the Nov 4 high. EURUSD adds to yesterdays gains, nearing further the key $1.3470 resistance 38% retracement of the decline from the Nov high to the Dec low. WE COULD SEE FURTHER USD LOSSES TODAY in reaction to this this afternoon's release of the Dec FOMC minutes, which will likely reveal the same dovish talk with the exception of Hoenigs hawkish dissent against QE2. But with Hoenig absent from the 2011 voting schedule (replaced by Minneapolis Fed Locharlakota) we may not necessarily see a dissent from the new rotated members in Q1. Clevelands Fed Pianalto replaced by dovish Evans of Chicago Fed. Dovish St Louis Feds Bullard will be replaced by Dallas Feds Fisher (extra hawkish in 2006-7 until he made a 180 degree turn as the crisis erupted in 2008). One hawkish addition, however, will be the return of Philadelphia Feds Plosser replacing Boston Feds Rosengren. Thus, we may see EURUSD testing 1.3470s and cable near 1.5670s, leaving us with USDJPY as the only likely positive pair for USD.

Ashraf's interview with AlArabiya earlier today http://bit.ly/evp0Ru

HAPPY NEW YEAR everyone. USD Index opened above last weeks low of 78.82, which scraped below the Dec 14 low. Yet, it may become misleading to focus on this USDX as it excludes the high flying commodity currencies of AUD, NZD and NOK. I havent abandoned my medium term negative bias on EURUSD and $1.27 objective as long as no WEEKLY close above $1.33 takes place. In the event of a successful close above $1.33, euro bulls will watch the $1.3475 resistance --(lows & subseq highs as well as 38% retracement of the decline from the Nov high)as the subsequent barrier to break. Todays data US Data strength (ISM & construction spending) may serve as a robust foundation for the falling USD especially in the event where US payrolls deliver the +100K rebound from the dismal +39K shown in Nov. A MORE DETAILED ANALYSIS of the next 6 months in FX as well as learning from predictions that did NOT work will be dissected in my 1-day London course on January 23 http://www.ashraflaidi.com/products/workshop01/