Intraday Market Thoughts Archives

A recording of Saturday's webinar will be posted on the website early next week and can be accessed for a week by those who purchased the webinar before Saturday. Ashraf's part on Forex Trading & Intermarket Dynamics went on for +3 hours. Chris Lori's section dissected traders' various psychological profiles and how they're incorporated into the real world.

There are no fundamental explanations to the sustained market rebound in equities and risk currencies. But the ensuing rallies in EURUSD, GBPUSD, AUDJPY and other risk pairs remain well within their resistance levels. The action in FX is largely a reflection of the rebound in stocks. More importantly the new lows for the month put in EUR. GBP and AUD could be used as an easier incentive for the bears to drag these pairs back.VIX seen again closing above its 100-day MA. GBPUSD showing its usual pullbacks after peaks seen in later London trade. Deadline for Saturday's Webinar registraton closes at 15:00 EDT (19:00 GMT) http://bit.ly/338li

The unambiguously negative jobs report (Unemp rate to 9.8%, payrolls -263K) triggered an initial jump in USD and JPY, only for the former to retreat lower as oil regained 70 (resist still capped at 72.30) and stocks curtailed their losses by over 60% from session lows. Post-jobs whipsaws in the markets are frequent but must not be overshadowed by FUNDAMENTAL DRIVERS FOR RISK AVERSION (especially with such jobs report bond yields testing 3.10%). EURUSD resistance pushes up to $1.4645-50, while GBPUSD rebound seen limited at $1.5945. Long USD positions best be hegded with short USDJPY, which eyes 88.50. REGISTRATION DEADLINE for SATURDAY'S WEBINAR IS TODAY 15:00 EDT (20:00 GMT) http://bit.ly/Ln0cM

Ashraf's Special Video Report previewing the US Jobs Report http://bit.ly/19ZEQS

USDJP vulnerable to a 89 break and into 88.70

JPYis the strongest currency today, followed by USD and CHF.

SAMPLE CALL FROM TWITTER 9 hrs ago today : "AUDUSD doing what it did after Sep 8th, Sep 16, Sep 22 and ... Target preliminary 0.8750 from current levels" AUDUSD was trading at 0.8810 at the time of trade. It is now at 0.8701. !st IMT of the day targeted EURUSD at $1.4520 when it was trading at $1.4585. Today's session low was $1.4519. we STRONGLY RECOMMEND traders download Stocktwits Desktop (not tweetdeck) to get all of our tweets (twitter/alaidi) http://desktop.stocktwits.com/

LAST WEEK WE TOLD YOU the S&P500 would need to track down to the level of falling oil to maintain its positive correlation. The gap left by the two has now been filled http://bit.ly/apkTz (due to rising oil and falling stocks) but with the VIX ABOUT TO CLOSE above the 100-day moving average for the first time since January 15th, falling stocks are here to stay and both stocks and oil are seen extending their downtrend as the Iran-Oil tensions abate. More INSIGHTS on INTERMARKET ANALYSIS ACROSS COMMODITIES & FX in Saturday's Webinar http://bit.ly/Ln0cM

FALLING STOCKS, BOND YIELDS, OIL PRICES has been our forecast for the past 8 weeks, as riskaversion supported by growth concerns and a firmer USD. Markets extend losses, while oil drops back below $69.70 as Iran accepts to invite inspectors. USDCAD, EURJPY, AUDJPY hit the targets communicated in the forum and twitter at 1.0780, 130.50 and 78.20. The decline in the manuf ISM was instrumental in accelerating stocks selloff. GBPJPY on course for its biggest weekly decline of the year, while GBPUSD eyes $1.5880. 10 yr yields break below 3.26% support, hitting a 4-month low. FInd out more about the implications of falling bond yields and the unfolding intermarket relationships in Saturday's webinar http://www.ashraflaidi.com/products/sem01/

Markets await the first batch of US data releases; weekly jobless claims (exp 535K, prev 530K) Aug consumer spending (exp +1.1%,prev 0%). July pending home sales, Oct ISM manufacturing and construction spending follow at 14:00 GMT. EURUSD hit a $1.4520 session low after ECBs Trichet reiterated position against excessive FX volatility and says exit strategy should start in 2011. EURUSD daily shows trend line resistance dragged down to $1.4620. JPY strength seen cropping up after brief retreat.

Nikkei closed below 10K for the first time in 3 months despite an improvement in the tankan survey for business sentiment to -33 in Q3 from -48 in Q2. UK manufacturing PMI declined unexpectedly in Sep to 49.5 from 49.7, showing the second monthly decline. PMIs in Italy and Spain also fell while those in Germany and France edged up. FTSE-100 dips back to negative territory, while EUR and GBP drop mainly against USD. Despite speculation about the 6-nations pressing Iran to come clean on its nuclear set up, we do not expect the imposition of sanctions. EURUSD and EURJPY eye interim support at 1.4520 and 130.50, which could be pressured by emerging risk aversion resulting from the US data releases (consumer spending, ISM manuf, construction and pending home sales) 2 DAYS LEFT TO REGISTER FOR THE LAID-LORI WEBINAR http://bit.ly/Ln0cM

CHICAGO PMI IMPLICATIONS FOR ISM MANUF. Today's decline in the Sep Chicago PMi from 50 to 46.1 was the first decline after 3 straight monthly increases, accompanied by a retreat in below the 50.0 expansion level in each of the production, new orders and supplier delivery indices. The employment index edged up by a negligible 0.1 point to 38.8. The strong positive correlation between the Chicago PMI and ISM manuf stands at a monthly 0.91 since 1990 http://chart.ly/rfqy2y

, suggesting that tomorrows release of the Sep ISM shows a strong likelihood for a decline from the previous Aug 52.9 reading. The August expiration of the cash for clunkers program may have been instrumental in causing a drag across the indices. $69.95 in crude (trend line resistance from Sep 17 high) corresponds w/ $1.4675-80 in EURUSD.

Watch Ashraf's Video Analysis on the ECB tender, ADP surbey, Chicago PMI, EURUSD, GBPUSD, EIA invetory data & oil price action http://bit.ly/RCl5T

Those who followed our prior IMT on the ECB tender saw no surprise in the initial EUR rally after the ECB tender was less than expected at 75 bln (see rationale in IMT). BIGGER THAN EXPECTED decline in ADP of 254K (vs expected 200K) boosted USD and JPY, while better than expected revision in Q2 GDP showing smaller decline further boosted USD gains. EURUSD seen testing $1.4570, GBPUSD finds support at $1.5955. EIA INVENTORY DATA DUE at 14:30 GMT expected to show a build of 2.1 million barrels in crude inventories and a buildup of 1.2 million barrels in gasoline stocks. Yesterdays release of the API showed a build of 2.76 million barrels in crude and 2.3 million barrels of distillate. Watch 68.60 resistance in oil, which trigger a pullback to 66.20 in event of furtehr builds. We warned repetitively in this morning's tweets http://twitter.com/alaidi about the strong likelihood for a EURCHF bounce off the 200-day MA of1.5080s. EURCHF is now up 100 pips. GBPUSD failed right at the $1.6120 resistance mentioned this morning before falling a full cent. Techs eyeing $1.5955.

All eyes on the ECBs 2nd 12-month refinancing operation, with the allotted amount seen in the 90-120 bln range, which is far less than the record 442 bln lent at the central banks operation in June. Flushed with unlimited liquidity at 1.0%, banks are expected to have less of a need for funds at todays operation. An amount on the lower end of the range would imply less demand for funds at future operations, which could be EUR-positive, while a higher than expected amount indicates robust appetite for loans and the need for more of such operations, thereby possibly dragging EUR lower. The results of the option are due at about 9:15 GMT (10:15 GMT). Also watch EURCHF drifting around the SNB intervention territory of 1.51 and a possible lift-off back towards 1.5140s. Cable seen capped at 1.6120.

View Ashraf's Video Analysis on EURUSD, GBPUSD, USDJPY, USDCAD, oil, ECB/Japns jawboning, ADP preview and more http://bit.ly/1uUmQO

Four days left until the Intermarket/FX Webinar

http://bit.ly/h4fjs

Oil's brief dip below $66 is SHARPLY REVERSED back up towards $67 on INCREASED GEOPOLITICAL TENSIONS vis--vis possible sanctions on Iran. Upcoming G6 meeting re Iran on Thursday could also help support oil. USDCAD back towards 1.0880s. The impact of better than expected house price figures was offset by an unexpected decline in August consumer confidence, whose jobs plentiful component hit 26 yr lows. US 10-yr yields break below 3.30%, eyeing key support of 3.25% support38% retracement of the rise from the Jan low to the June high. More equity losses still seen negatve for GBPUSD and EURUSD. ASHRAF's APPEARANCE on BNN yesterday http://bit.ly/192UoP

EURUSD extends losses as markets fear an intensification of interventionist rhetoric (ECB yesterday, Japan Fin Min today) could accelerate losses. Remarks from Saudi Arabias central bank chief indicating no change in the nations FX reserves policy is also helping to drag down EURUSD below the right shoulder (1.47 resistance), making $1.44 as a viable target, especially in the event of disappointing US consumer confidence data. FX and oil traders will also keep an eye on todays API data on oil inventories, which will serve as a preamble to Wednesdays key EIA figures. Oils failure to regain 68 gives in to 66.10, dragging CAD across the boar and lifts USCAD back above 1.09, An unexpected build in API could help USDCAD retest 1.0960s. IMPORTANT HISTORICAL PATTERNS IN GBP FUTURES WILL BE DISCUSSED IN SATURDAY'S WEBINAR.

Stronger than expected Sep CBI retail sales 5-month high) boosts GBP across the board. $1.60 slated to become the next key resistance. A breach above $1.5970 would be possible in the event of prolonged risk appetite US consumer confidence (14:00 GMT exp 57 from 54.1). EURUSD dips back below $1.4590s on a combination of ECB jawboning and selling in European bourses. Oils inability to regain 68 should also weigh on risk currencies to the benefit of the USD. Remarks from Japanese Fin Min Fujii about readiness to intervene are no more than attempts to dispel misconceptions of a benign neglect policy by the new govt in the face of a strengthening currency, rather than the beginning of an interventionist campaign against rising JPY.

EURO DRAGGED BY JAWBONING FROM TRICHET & NOVOTNY reiterating the importance of a STRONG DOLLAR. EURUSD drops below 1.46 despite stock's rally. Aussie attempting to catch up with Kiwi after the latter was damaged in Asian trade following its violent run against USD and GBP. The 1.5% rally in US stocks has slowly lifted AUDUSD towards 0.8740s, eyeing last weeks 0.8780s highs. The level would only be breached in the event of another convincing improvement in the US ADP report on private sector jobs (due Wed 12:15 GMT), which could pave the way for a promising US payrolls report. Thursday's release of US manufacturing ISM could also serve as a catalyst for a possible data-confirm recovery bounce. the inability for AUDUSD and NZDUSD to regain 0.8780s and 0.7250s would reflect FX reluctance to extend the risk trade ahead. DETAILS ON SATURDAY'S FOREX WEBINAR http://bit.ly/Ln0cM

Watch ASHRAF's INTERVIEW earlier today discussing yen strength, oil, S&P500, and GBPUSD http://bit.ly/192UoP The usual Monday bounce in risk appetite emerges in the US, attempting to break the selling cycle into Asia. Rebounding oil eyes an attempt to regain 67, while S&P500 eyes a close above 1,060. EURUSD faces interim pressure at 1.4680, while the recovery in GBPUSD and USDJPY remains tepid at best. GBP remains the biggest loser of the day, after NZD. Recovery limited at 1.5980.

Nothing in the multi-paragraphed G20 statement stops traders from continuing to sell GBP and buying JPY in early Asian trade as the deteriorating technicals of risk appetite measures (equity indices, yen crosses and oil) move further towards risk aversion. The speed of yen buying has intensified to the extent of breaching GBPJPY below 140 and USDJPY towards 88.20s. The victory of the centre to right coalition in German elections gave a short term boost to EUR that was only taken advantage of by the risk aversion trade to sell the currency on strength against USD and JPY, targeting 1.4590 and 129. 40 respectively. Watch for oil retesting 66 and GBPUSD eying 1.5720.