Intraday Market Thoughts Archives

With everyone asking about yield curves & Fed tightening, Chapter 9 of my book details how we can decipher those possibilities via the steepness of the US yield curve and USDJPY . The booked successfully predicted how to assess EASING (in Ch 6) as well as TIGHTENING (in Ch 9) shifts by the Fed when it was completed 18 months ago. ** HERE ARE THE TESTIMONIALS & CHAPTER LISTING http://bit.ly/5qhL9j **

What every GBPUSD trader must know http://bit.ly/6MaZ7E

If you have not voted, please do so in #finance this way everyone who thinks finance will think (forex, equities, commodities, bonds) and that is what we have been offering you on AshrafLaidi.com and twitter for the past 24 months. Thank you.

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OIL REMINDER: Traders must realize oil will have its first weekly close above its 100-wk MA for the 1st time since Dec 08. We warned in our Tuesday article http://bit.ly/88mm6K of an oil breakout above 82 and 89 despite a robust USD. This may be at odds with our expectations for USDCAD to regain the key resistance of 1.0440 SWISS FRANC IS THE HIGHEST PERFORMING CURRENCY OF THE DAY (beating JPY, NOK & AUD) and USDCHF remains in line with our HotChart respecting the 1.0380 resistance and the 1.02 interim support. http://bit.ly/shorty Stay with USDCHF as a short hedge of USD longs. http://shortyawards.com/alaidi

USD STABILIZING Although the 85K loss in US Dec payrolls was worse than expected, the figure followed not only a net positive creation of 4K jobs in November (revised from -11K) but also emerged after 5 consecutive monthly improvements in payrolls (Jul-Nov), which was not seen in any of the recoveries of 1991 or 2003. Current positioning in credit markets lends support for prolonged USD strength as US 10-year yields hold above their 3.75% support (since Nov 27). Both USDJPY and US10- yr yields hold at 3 week trend line support at 92.20 and 3.75% respectively. USDCAD holds at 1.030, looking to regain 1.038, while GBP extends loses across the board, driving down cable, eyeing $1.5940 TL support. THANKS FOR VOTING ME. If you voted for me in #finance, please consider other categories such as #education #news #nonprofit using the pulldown menu

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USDCAD TECHS http://bit.ly/7bMDjx Confluence of prev support & 3 week trend line Canada's Dec job figures came in at a disappointing -2.4K ( exp +20K) after a surge of 79K in Nov, with the unemployment remaining unchanged at 8.5%. The Canadian dollar, which remained the second highest performer after the Aussie this week as well over the last 4 weeks, is now under broad pressure as traders pare gains. alaidi slipped to 3rd position in the SHIORTY AWARDS so let's get MORE HAWKISH and let's make history http://shortyawards.com/alaidi

USD CFTC POSITIONING ALREADY ROBUST: Today's US jobs report could be a non-event in FX markets due to the increasing volume of long positions in the US dollar, as opposed to 4 weeks ago when the combination of unexpectedly positive report and deep positioning of USD shorts produced a sharp rally in the greenback. The latest CFTC figures on speculative FX futures showed net JPY shorts (vs. USD) rose to -14,903 contracts in Dec 29th from a net short position of -1,011 on Dec 22nd. Meanwhile, EUR net shorts (vs. USD) soared to -33,797 contracts from -14,327 contracts in Dec 22. Current EUR net short positioning is the largest since the record net shorts of -40,654 contracts reached in mid September 2008. And with markets expectations for payrolls raising the bar to a net creation of jobs, theres little room for a significant USD jumps. Yet, we still expect USD to preserve strength into next week, barring the occurrence of a job loss higher than 60K and an unemployment rate higher than 11%.

CHARTING NONFARM PAYROLLS. http://chart.ly/d4f86c US Dec nonfarm payrolls are now expected unchanged following a net decline of 11K. Note that payrolls have now stood above their 3-month moving average for 4 straight months, indicating the a longer strong of improvements than in the more mess pace of improvement in the 2002-3 recovery, which was a double dip recession in the aftermath of Sep 11. As for the unemployment rate of 10%, it is now at the same level of its 3-month MA for the 1st time since July 2009 (when the unemp rate last fell and USD rose on the report). Expect USD to regain ground as long as payroll losses are less than 70K and the unemp rate is does not push above 11%.

USDJPY failed to touch its 200-day MA, which would have been the first time since August 2009. 92.80 is set to be the support before tomorrows NFP, which could pave the way for a successful break (close) above the 200 day MA of 93.50. GBPUSD bottomed right above the $1.5980 target but our expectations for deteriorating UK-US yield gap means the upside remain limited at $1.63. USDCHF capped at the initial 1.0370 resistance from the latest HotChart. Thanks again for those who voted for alaidi . Please make sure you state the reason for your vote so that it is counted. http://shortyawards.com/alaidi

US dollar regains ground after the post-FOMC minutes sell-off, now gaining across the board with the exception of the CAD. We noted on twitter last night that we disagreed with the market reaction of selling off USD after the FOMC minutes, which were communicated by the media to be pro-low interest rates. But there were also some FOMC members who did show concern about excessive dollar depreciation. GBPUSD clearly breaks below $1.5940 now heading towards next target at $1.5880. GBPCAD drops for the 6th straight day, eyeing its 24-year low. USDJPY still on its way to the 200-day MA of 93.50. MANY THANKS for those who voted for us on the Shorty Awards. Your support is tremendously appreciated ! http://shortyawards.com/alaidi

THANKS EVERYONE WHO VOTED & "GO AHEAD" FOR THOSE WHO HAVE NOT YET. alaidi currently ranks #3 in Short Awards in the Finance Category behind Stocktwits & the CME. MAKE YOUR VOTE COUNT in the link below:

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Ashraf

Here is your chance to vote for your favourite provider of short real-time content (aka twitter). If you like what you have been reading on twitter.com/alaidi, feel free to speak up !

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Ashraf

Oil drops off its $82.15 high after EIA inventories data showed a build of a 1.3 mln barrels, 4 times greater than expected. While the daily oscillators in crude show signs of toppishness, the weekly trend remains positive and $84.85 is a vialble target for the week ($88 for month-end) remains a target for the month. USDJPY forms a bullish engulfing pattern eyeing 93, while USDCHF remains confined to 1.0280-1.0380. Watch Ashraf at 12:20 GMT tomorrow on CNBC analyzing sterling & the Bank of England decision.

STERLING POLITICS goes from bad to worse, as 2 former Labour Party cabinet ministers called for a secret ballot on PM Brown's leadership ahead of the elections. Cable eyes a retest of the $1.5940s, while EURGBP eyes 0.9025 trend line. GBPCAD eyes the 1.6515 Dec low, which is the lowest since the Oct 15 high (when oil broke above 76). Dec ADP -84K (exp. -73K)The fact that the ADP has shown losses fewer than the 3-month moving average over the last 9 consecutive months highlights the improving trend in private payrolls as far as reduced firings are concerned.

Yen drops across as Japanese PM Hatoyama accepts the resignation of Finance Minister Fujii (due to poor health), lifting USDJPY back to 92.40s. GBPUSD hits the $1.5945 target before briefly rebounding towards $1.6060s only to come back down below $1.60. Expect a retest of $1.5940s, before the next emerging support at $1.5890. Check out our Global Economic Calendar for a list of actual and scheduled releases http://bit.ly/5pdFAN Better than expected ADP report from the US today could boost USDJPY back to 93.20.

Watch Ashraf's latest Video Commentary http://bit.ly/6OIyH discussing the unfolding correlations between the US dollar and energy prices as well as previewing tomorrow's release of the December ADP report

Although USD strength continued during falling equities, the US currency has shown modest declines during equity gains. Meanwhile, the unfolding strength in oil despite of a robust USD calls for $89 as a viable target in US crude. GBP is the biggest loser of the day while CAD retains its gains as crude holds firm. We still expect $1.5945 in cable. EURUSD technicals move from bad to worse and a retest of $1.42 remains in the works as early as as next week.

Watch Ashraf on CNBC Arabia today at 14:15 GMT discussing Commodities & FX

GBPUSD falls back below its 200-day MA after failing to break above the 38% retracement from the Nov high at 1.6236. We pointed out 1.6240 as a robust resistance in yesterdays IMT. Weaker than expected UK construction PMI prompted aggressive selling. Daily stochastics suggest prolonged fall towards $1.5945, followed by $1.5880. GBPCHF drops back below $1.65, with the likelihood of breaching $1.6430 support mounting.

Chris Ruud's Top 10 Tech Events in FX

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The USD index may be set for prolonged gains this month but USDCHF does not appear as positive. Latest HOTCHART on USDCHF http://bit.ly/54ydIa details the weekly outlookfor the pair,

Ashrafs interview earlier today on BNN discussing the dynamics in the US & Canadian job figures, http://watch.bnn.ca/#clip251668 FX impact and the outlook for the Fed exit strategy. US regains strength across against all FX except against FX board after US manufacturing ISM blows out expectations to hit the highest since April 2006 at 55.9. GBPUSD failed to break above that $1.6240 resistance cited as a 38% retracement and recent highs. USDJPY drops back to 92.30s, expected to regain 92.90s

Higher than expected manufacturing figures in the UK and Eurozone are boosting European FX against the deteriorating JPY and retreating USD. Nikkei-225 rose 1% to 10,654, closing above its 100-week MA. FTSE-100 is up 34 pts at a fresh 13-month high of 5447, facing its 200-week MA at 5552. GBPUSD regains its 200-day MA for the 4th straight day, testing the 38% retracement from the Nov high at 1.6236, which also coincides approx with the highs of Dec 18 & 31st. Next resistance emerges at Cable has usually extended its gains into the US session on days of stronger UK data and particularly in those of strong confirmation in the US. All eyes will be on US ISM at 15:00 GMT. SEE ECON CALENDAR for today's data as well as the rest of the week. http://bit.ly/5pdFAN

Looking back at 2000-10 in the markets and finance --By the Financial Times

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