Intraday Market Thoughts Archives

Ashraf Laidi leaves CMC Markets to focus on his website www.AshrafLaidi.com and operate as an Independent Global Markets Strategist. Ashraf, author of "Currency Trading & Intermarket Analysis" has spent the last five years acting as FX and global markets strategist for CMC Markets, providing analysis to clients as well as conducting TV interviews in English, Arabic, French and Spanish and holding seminars worldwide in the Americas, Europe Mideast & the Far East.

Ashraf will provide his intermarket analysis as part of the upcoming Premium Service on AshrafLaidi.com to start in mid April. . He will conduct seminars worldwide and offer market insights to private and institutional investor as well as manage his own private funds in FX & commodities. Ashraf's TWITTER feeds are @alaidi and @alaidiPremiumFX . Details on the Prermium Services will be announced soon.

If the 4th time doesnt work try a 5th time. The EUR 24 bln in required capital for Irish banks under the banking stress tests means the Irish govt will need to raise more capital than the EUR 35 bln allocated under the EUR 85 bln bailout package from the IMF and EU. Allied Irish Banks will need nearly times the $EUR 5 bln it was told to raise. The euro has gone from starting the day with a bang via the 2.6% March CPI and hawkish comments from ECBs Smaghi to the Irish stress tests. But EURUSD remains well above the Feb 14 trendline support of 1.3980. It is important to state the currency shall have a strong bias and retest the 1.4270s resistance mainly due to rate hike expectations rather than be dragged by peripheral problems. The other side of that coin is USD part, which enters another potentially strong NFP at or above the 190K. And so barring any upside surprises in US NFP, EUR will have next weeks ECB meeting to look forward to.

2.6% CPI and a little more hawkishness is enough for the euro. Ezone Flash March CPI jumped to 2.6% from 2.4% vs exp 2.3% justifying the latest hawkish talk from the ECB. EURUSD was already rallying before the data when after ECB board member Lorenzo Bini Smaghi said the bank should introduce series of gradual rates hikes in the Ezone. One of the reasons markets ignored last nights comments from Kansas Feds Hoenig that the Fed indicating the Fed needed to get on with tightening current ultra loose policy is that i) Hoenig is NOT a voter at this years FOMC and ii) Hoenig was the ONLY consistent hawkish dissenter throughout all of last year, therefore, his demands for tightening are NEITHER new or effective. And so that is why I quipped earlier today that ONE Hawkish ECB comments was nearly worth THREE times the impact of Hawkish Fed comments? 2 days ago I emphasized EURUSD would remain supported above the Feb 14 trendline support of 1.3980. Now resistance emerges at 1.4255.

Despite last week's bruising, the US dollar index ended well above that 3-year trendline support at 76.00. Today, it remains above the same key foundation with the help of Fed hawkishness as Bullard (non-voter) joins Fisher and Plosser in expressing his stance his stance against QE3. The revolving uncertainty with Portugal's finances and the latest downgrade of Portugal/Greece have certainly helped USDX as EUR makes up 57% of the index. In contrast, the record-breaking AUDUSD (at 1.0312) is NOT part of the index, thereby, sparing the US currency with any damage. Also adding to USDX stability is GBPUSD, whose weekly stochastics deteriorate by the day, eyeing $1.5840. USDJPY breaks out of 83, nearing further the 83.50 mentioned in yesterdays IMT. While we may encounter some Yen-positive risk-aversion in the event (just in case) of a disappointing US Friday jobs report, but the weekly stochastics and fundamental flows into Q2, suggest 83.90, followed by 84.40. Following up my bearish tweets on EURAUD, I stick with EURAUD target at 1.3420 on the weekly chart. ***** I will be providing these tradable tweets on my NEW PRIVATE TWITTER FEED

http://twitter.com/alaidiPremiumFX

Whats Next from AshrafLaidi.com?

These past 2 weeks have been involved in making the transition away from CMC Markets onto delivering a premium service on Ashraf Laidi.com. Starting next month, I will become an Independent Strategist, dedicating all my efforts to the upcoming services from AshrafLaidi.com. These will be unveiled in mid April.

There will be a FREE section of the website contributed by other staff as I will focus on creating the Premium Service as well as covering trading calls/analysis on a private twitter feed, available only to paid members.

The Premium Service will consist of 3 choices; 1) My Daily Analysis. 2) My Daily Analysis combined with Market News International's FX Bullets; or 3) MNI's FX Bullets Alone.

MNIs FX Bullets service is a unique streaming service of insights focusing on Forex, market talk and instant post-data analysis. It does NOT regurgitate the news or specialize in beating the headlines, but rather, delivering the instant analysis and interpretation of most major data headlines as well as giving the heads-up on data releases, central bank meetings, technical levels from select research, option expiries, FX fixings and much more. AshrafLaidi.com is the first service to bring MNIs FX Bullets to the retail trader.

As for the CHARTS on the FORUM, I have not forgotten about this, but it will take slightly more than we thought.

I will also be doing VIDEO Reports (free of charge)

If you are in EUROPE, do come in to the London Traders Expo on April 8-9 (Free Registration) where I will have my the AshrafLaidi.com booth. I will moderate an FX panel and conduct an 1-hr seminar on April 9. The rest of the time will be spent doing On-Booth presentations. More Details Here:

http://bit.ly/ejFQxz

Ashraf

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.

EURUSD recovers above $1.41 despite FT reports that ECB had bought Portuguese bonds on Mar 18 and that it may snap up more purchases as 10-yr yields hit new record of 8.21%. Also reports that Spains Banco Base will ask for over EUR 1.3 bln indicate the Cajas difficulty of meeting new capital requirements. Possibly weighing on the USD are the dovish speeches from Feds Evans (Chicago) and Rosengren (Boston) each of whom implied the continuation of QE2 to at least June. And with nothing in the news to upset risk appetite, EURUSD technicals seek to retest the $1.4150 trendline resistance, before attaining $1.4190 (seen conservative cap for the day). $1.4280 remains the double-top, which is unlikely to be broken, considering the broadening uncertainty with Portugal. But the question that euro traders must ask: would a Portuguese bailout really cause the euro to fall as long as it does not mean a default? After all, we did have 2 bailouts and no defaults. Or, is the adequacy of the EFSF and later ESM be stretched thin by a 3rd bailout? Having said that, EURCAD remains on a downfoot as the gains in CAD vs USD clearly outpace those of the EUR vs USD. 1.3620 seen as the interim downside target, with key trendline foundation at 1.3570.

500 pips in 5 days is quite a move for GBPUSD. Why would a currency fall so much despite having at least 50-bps of rate hikes priced in? The UK Budget was deemed mostly neutral and borrowing requirements were in line w/ PM Cameron's initial plans. But the problem lies with the growth outlook, which was tacitly revised down by the latest Bank of England minutes. And although the BoE raised its CPI forecast to as high 5%, markets remain unconvinced with the BoEs ability to raise rates without disrupting an economy thats teetering on the edge of double-dip recession. The Office for Budget Responsibility lowered its 2011 GDP forecast to 1.7% from the previous 2.1%. Tomorrows final release of UK Q4 GDP seen at -0.6% from -0.5%. Also due tomorrow is data on M4, net lending and mortgage approvals. ===== GBPUSD trendline support remains none other than the 11-month support at 1.5850. With EUR pressured by ESM uncertainty and Portugals borrowing needs, EURGBP may see its gains capped at 0.8830s.

AshrafLaidi.com will exhibit at the April 8-9 London Expo. I will be doing On-Booth Presentations, 1-hr Seminars & Moderating FX Panel Click here for detail http://bit.ly/ejFQxz 1st 20 attendees at the booth will receive 2 free weeks of AshrafLaidi.com Premium Package.

Free Registration http://bit.ly/ejFQxz

Euro hit by Merkels election defeat in the Conservative stronghold state of Baden-Wurttemberg, where the Chrisitian Democrats have not lost since 1952. That is the CDUs 3rd electoral defeat after having lost in Hamburg and weak showing in Saxony-Anhalt. Merkels decision to shut down 4 nuclear reactors in Baden-Wurttemberg turned out costly. Euro losing across the board, with EURUSD & EURCAD suggesting double tops at 1.4270s and 1.390 respectively. EURCAD drops 80 pips from Thursdays chart http://chart.ly/nrjnhgp eyeing interim target at 1.3690. EURAUD breaks below 1.3780 trendline support. EURGBP turning bearish but weekly chart continues to defy the bears after the breakout above 0.87.