Intraday Market Thoughts Archives

Here are 3 resolutions I shared with FXStreet; related to the British pound, Coins & Intermarket Analysis. The Coins part wont be until late Q2.

http://bit.ly/4R9GDd

Good Luck Everyone and have a Safe & Prosperous New Year

Ashraf

The US DOLLAR INDEX could be sending signals similar to those in July 2008, when the bottoming process turned into a full fledged rally that was boosted by massive deleveraging in equities and commodities. The fact that the current USD rally is emerging despote strengthening oil and stocks suggests more powerful USD dvances ahead at the next downleg in equities. We will closely watch horizontal-shaped 100-week MA, currently at 78.90, which proves as the main barrier to the important 81.40 level, currently the 50% retracement of the decline from the March high to the November low. USDJPY has already hit the 93 target projected for Q1, but it's mostly yen weakness that is driving the move rather than USD strength. *** WISHING YOU ALL THE BEST OF WEALTH & HEALTH IN 2010 & BEYOND ***

USD strength continues to reassert itself at the slightest sign of a pullback in equities, but CAD and CHF remain relatively robust against the US currency. USDCHF continues to offer opportunities for range-bound traders between 1.0390 and 1.0300. There is no change in our positive bias in USDJPY favouring 92.20s and 92.60s especially as the Japanese currency proves daily that fundamental weakness is here to stay for at least 3-4 weeks. GBPUSD also shows no signs of breaking from its downtrend, now eyeing a retest of $1.5800. GBPCHF remains vulnerable to retesting 1.6460s

Introducing the GLOBAL ECONOMIC CALENDAR at AshrafLaidi.com (in Association with FXStreet.com). Events & data releases from the US, Eurozone, Japan, UK, Canada, Switzerland, Australia & New Zealand. Add to your bookmark now http://stk.ly/7wRaSf US home prices (S&P/Case Shiller) due at 14:00 GMT exp -7.5% y/y from -9.4% y/y. US Dec consumer confidence due at 15:00 GMT, expected at 53.2 from 49.5, making the first figure above 50 since September. Also watch the Perceptions of Available Jobs Index (% of those reporting jobs plentiful minus % of those reporting jobs hard to get) could be expected to stabilize after reaching -46.6 in Nov.

The commodities-based CRB index closed up 1.3% at 284.45, nearing the 2009 high of 285.18 reached in October 21. Note that October 21 was 6 days after oil had hit its high for the year at $82.00. Today, oil gains for the 4th consecutive session to close at $78.77, facing 80.81 as the key resistance, which coincides with the 100-week MA. Oil has not broken above its 100-week MA since October 2008. Yen weakness is increasingly seen as the preferred funding currency for these risk trades, especially after Tokyo unveiled its biggest budget ever at Yen 92 trillion. USDJPY is still expected to retest 92.25, followed by 93.00, while CADJPY is set to recapture the 88.20s highs from mid October.

Ashraf's interview on Bloomberg TV late last week http://bit.ly/8UPerf discussing recent the recent advances in USD gains and how far they will continue.

S&P500 finally closed well above the crucial 1120 level, which marks the 50% retracement of the decline from the Oct 2007 high to the Mar 2009 low. Long acting as an important parameter for risk appetite, 1120 may pave the way for further gains in equities. But how far can equities rise with prolonged advances in the US dollar? Or, will the inverse relationship reassert itself? Traders may not simplify the question without adding more variables, such as the individual currencies against which the US dollar will be determined. Only in the last week of January will markets return to full normalcy. Figuring out the time element of these dynamics makes accounts for more than half of the challenge, especialy for leveraged FX traders. We will tackle these issues throughout the year.