Intraday Market Thoughts Archives

SELLING EXTENDS IN FRIDAY US ALL TARGETS in previous IMT either hit or 10 pips away from their objectives; AUDUSD, EURUSD and CADJPY as Dow tests 10K. We now expect EURUSD to hit 1.1630-50 by June 16. For today/Monday, USDCAD looks for 1.0570, while AUDCAD 0.86 prelim target rmeains viable as warned in my WEBINAR EARLIER THIS WEEK TO RIVKIN Securities of Sydney LISTEN HERE: http://bit.ly/9o1WLG $EURCHF seen retesting below 1.39, for 1.3780s next week

CENSUS FAILS CONSENSUS US May PAYROLLS rose 431K, unemp rate at 9.7%, but with as many as 411K census workers being hired, this is a disappointing figure since census workers are temporary, which leaves out less than 25K workers hired. EURUSD eyes 1.1970, with any rebound seen capped at $1.2120. RUMOURS OF derivatives losses at Societe Generale. CADJPY fails to break above 89 trend line resistance from May 4 high, now eyeing 86.80. AUDUSD eyes prelim target of 0.8280. EURCHF CRASHES to new all time low of 1.3862 before rebounding to 1.3923, now eyeing 1.3770.

DONT FORGET CANADIAN JOBS, due in 45 mins (11:00 GMT) expected at +21K from 109K, with the unemployment rate expected down at 8.0% from 8.1%. Positive CAN figures should further prop CADJPY towards 89.70 (61.8% retracement), followed by 90.40. USDCAD remains supported at 1.0335. Downside surprise in CAN figures combined w. disappointing US figs should prop USDCAD back to 1.0450s. ON MONDAY WE SHOWED the Spain-Germany 10-year spread, which was at 1.53%, warning against 1.80% (see Monday chart http://chart.ly/xprxsy Today, the spread hit a fresh high of 1.80%. The reason we continue showing this chart, is that 1.90% is attractively low compared to the +900 bps seen for Greece earlier this year, which means more upside remains for these spreads and hence, downside for euro.

200-DAY MA RESISTANCE. And once again 1107 in S&P500 and 10290 in the Dow-30 continue to hold as key ceilings for nearly 2 weeks, representing the 200-day moving averages. Last Friday, these levels were abt to break only for the Fitch downgrade of Spain to stand in the way. Could todays jobs report be the catalyst preventing these two indices from closing above their 20-day MAs? US ADP May payrolls rose 55K (vs expected +70K) following a revised 65K in April from 32K but continuing jobless rose by 31K to 4.7 The employment component of the services ISM did regain the 50 level. YESTERDAYs USDJPY CHART remains on the way up http://chart.ly/8nv646

USDJPY WEEKLY CHART http://chart.ly/8nv646 shows USDJPY may lag behind behind other yen crosses because USD is underperforming other currencies during the current bounce in risk appetite. The break of the GREEN TRIANGLE triggers an extension into the RED CHANNEL, which suggests a possible 92.85-90, before 93.60. Weekly chart is positioned for further gains towards 94.50s, especially if the positive stochastics crossover (blue circle) pivots to the upside.

UNEXPECTED TRADE SURPLUS in Australia making the Aussie the days strongest currency, as April trade surplus hit A$ 134 million due to 11% increase in exports (+25% rise in metals/iron ore exports). AUDUSD breaks out of 0.8420 trendline, eyeing 0.8520. AUDJPY stands to extend gains towards 78.80, followed by 79.30s. BOTH CADJPY and GBPJPY are up, but as we noted in previous IMT, CADJPY is the outperfomer, eyeing 89.35-40, followed by 89.70s.

GBP or CAD? We noted yesterday CADJPY and GBPJPY were the likely aggressive gainers on a combination of Japanese political uncertainty, improved risk appetite and robust UK and CA data. GBPJPY breaks above May 10 trend line, now eyeing 135.90, while CADJPY could potentially extend gains towards 89.60s, which is the trend line resistance from the May 4 high. Thus, as long as Asian stocks continue gain from the NY rally, these yen crosses are set on their upmove. 10290 in the Dow and 1105 in S&P500 are the elusive 200-day MAs, which need to be broken this week for the bulls to maintain hopes of a real rally.

IRAN CENTRAL BANK says it has begun the first phase of sales of about 45 billion euros of its reserves for dollars, according to the Iranian state-run Jaam-e-Jam newspaper reported. 15 billion euros will be sold in the first stage of the transactions. But central banks from Brazil, China and Russia have already said they will not be selling out of their euro holdings. EURUSD vulnerable to retesting $1.2130.

EURCHF draws near to 1.41, retracing more than 75% of the May 19 SNB intervention. Traders are aware of the 1.40 support (point of intervention), which suggests they will retest 1.4050s before drawing closer to 1.40.

EURNOK breaks below May 17 trend line support after failing to hold

7.95 consolidation, eyeing 7.885, followed by 7.82. 8.02 remains interim ceiling. GBP is the DAYs BEST PERFORMER, but UK data ahead could impact the currency. See calendar for detail http://www.ashraflaidi.com/economic-calendar. GBPUSD eyes 1.4820s, while CRASHING EURGBP eyes medium term target 0.81555-50% retracement of the low from Jan 2007 to the high of Jan 2009.

ANOTHER JAPANESE PM BITES THE DUST, this time PM Hatoyama steps down over the destabilization of his tripartite coalition govt resulting from his failure to move the US military base out of Okinawa. Both JPY and USD had recovered in afternoon NY trading as US stocks ended in the red. Markets turn to more European PMI figures as well as the US ADP report, which will NOT include the impact of Census workers expected to add +200k in Friday's NFP (issued by the Dept of Labour). The Japan news means that any improvement in risk appetite will be better capitalized upon viabuying Yen crosses (CADJPY, NZDJPY and GBJPY). Meanwhile, EURGB deepens losses below the key 0.84 support, eyeing 0.8150. DUE TO OVERCAPACITY, LOCATION OF ASHRAF's SYDNEY SEMINAR TODAY has been moved to MUSEUM OF SYDNEY http://www.hht.net.au/museums/mos 6 pm Sydney Time

Listen in to Ashraf's 45-mins webinar with Rivkin Securities of Melbourne, discussing the major currencies, the proposed resources tax on profits in Australia and the use of technicals

http://www.rivkin.com.au/media-centre/rivkin-virtually-live-with-ashraf-laidi.aspx

WATCH ASHRAF spanning the globe in a few sentences; EU sovereign debt; China impact; Australia & Canada Effect

http://bit.ly/9MthzX

On the Aussie vs the Loonie

http://bit.ly/b93RPY

On RBA Holding Fire

http://bit.ly/cbrrWr

SAMPLES of Ashraf's interview on CNBC Squawk today discussing the impact of the Australian resource tax, the US jobs report and the Canada rate hike http://bit.ly/baycNH

TRANSCRIPT of Ashraf's ABC News interview on Eurozone, Australia, China and the US http://bit.ly/dnSfsD

CHARTING SPAINs 10-YR SPREAD. http://chart.ly/xprxsy Spains 10 year spread breaks out of a 3 year channel, 4 weeks after it broke a 14-month triangle, paving the way for a retest of the 1.64% high attained on May 7, before a possible extension towards the 1.80% target. Considering the political risk in Spain (austerity measure passed by only 1 vote), soaring Spanish yields could prove the trigger for the next wave down in the euro.

Ashraf's interview earlier on Australia's ABC Business News Today (11 mins) Titled: "Regional Effect"

http://australianetwork.com/businesstoday/archives.htm#videoplayer

GBP REMAINS PRESSURED after the resignation of UK Chief Treasury Secretary (second to Chancellor of Exchequer) over illegal expenses. Mr Laws is credited with engineering the 6 bln in planned budget cuts. GBPUSD eyeing trendline resistance from Apr 26 high at $1.4580, followed by $1.4630. Meanwhile, Caja Madrid, Spains second largest savings bank starts merger negotiations with 5 regional banks in the hope of forming a larger balance sheet and tap 99 billion in government bailout funds. The Spanish government wants to consolidate the current 45 regional caja banks down to 15.

YEN BIGGEST LOSER in Asian trade on a combination of improved risk appetite and a split in the Japanese govt coalition. Japans Social Democratic Party has exited the tri-partite coalition (SDP, DPJ and PNP) after the DPJ's decision to allow the US military base to stay in Okinawa rather than have it move totally from the Island. Although the coalition maintains its majority in parliament, it will become weaker ahead of July's upper house elections. JPY is weakest currency, followed by USD and GBP. Both London and New York markets are closed for Bank Holiday. USDJPY breaks the May 4 trend line, eyeing 92.15, while CADJPY eyes initial resistance at 87.450-50, followed by 88.20-25the 50% retracement of the decline from the 94.38 high to the 92.09 low. REGISTER FOR ASHRAF's SEMINARS IN AUSTRALIA (Melbourne on Tuesday, Sydney on Wednesday) https://www.cmcmarkets.com.au/forms/lg-seminar-invitation