Archived IMT (2011.03.21)

Rising AUDUSD and falling USDCAD reflect the typical nature of rallying commodity currencies (AUD and CAD) during improving risk appetite (Dow-30 +113, SPX +12). Since AUDCAD remains unable to break 0.99, the bias remains in favour of CAD, thereby siding w/ USDCAD shorts instead of AUDUSD longs during improved risk appetite. I mentioned last week that EURUSD was another preferred pair during any stabilization in risk appetite (see longer article and prior IMTs). With USDX having broken below the key 76 foundation, USDCAD now stands to break below the 0.9770s trendline to retest 0.9720 and possibly 0.9680. Further gains in oil prices would be one (but NOT the only) driver for falling USDCAD. US existing home sales today and UK CPI tomorrow will be key drivers to FX in the next 24 hours. Stocks also boosted by AT&Ts announcement of a $39 billion deal to acquire T-Mobile USA. These Intraday Market Thoughts will no longer be available free of charge starting next month (not next week) when AshrafLaidi.com introduces a new Premium FX Service.