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YEN STILL DOING IT as the mere sign of profit-taking in global bourses, sends yen crosses falling across the board. AUDJPY proved once again unable to break the trendline resistance of 77.70s, extending from the June 21 high. And with AUDJPY Daily stochastics showing a negative cross-over, prelim...

BACK TO SCHOOL & RISK AVERSION as Asian stocks dip back into the red; Jullia Gillard keeps power for Australias Labour Party thanks to the backing of 2 independents. Though her tax on resource makers is a watered down version of her predecessors 40%, both Aussie equities and the currency are...

AUDCAD has rallied 12% from its June lows as . . . CAD descended in broad selling from an onslaught of weak US data. So will the tide start to turn? Tuesdays RBA decision is widely expected to keep...

TODAYs GLOBAL EQUITY RALLY marks the importance of the 1040 support in the S&P500, which held up successfully in February, May flash crash and mid June, with the exception of 3 consecutive days in end of June. The fundamental catalyst for the buying was the rebound in Chinas manufacturing PMI as...

CANADA, CHICAGO & FOMC MINUTES, are due today. Canada Q2 GDP is expected to slow sharply to 2.5% q/q from 6.1%, which should prolong USDCADs return towards 1.0660s. Note 1.0670s acted as a consistent resistance over the past since late June and so a sharp slowdown will likely drive CAD shorts to...

EURCHF HITS FRESH RECORD LOWS at 1.2936 less than a day after SNB president said the cenbank is ready to intervene again. There are a few obstacles to any durable bounce in EURCHF; i) the Swiss franc is strong to the extent of dragging the rising USD down to 8-month lows at 1.0230. Chartists must...

The BOJ OPTED FOR easing than actual FX intervention, via expanding its 6-month fixed rate lending facility to 30 trln yen from 20 trln yen. The yen rose as a result of the confirmed absence of intervention. See previous IMT explaining why I continue to see no yen-selling intervention. Yen gained...

US Q2 GDP REVISED down to 1.6% (vs. exp 1.4%) from advanced 2.4% reading, triggering a relief rally in equities and BROAD YEN SELLOFF, especially since the Japanese currency has been already hit by: i) fresh political fallout in Japan and ; ii) escalating signals of a looming stimulus package...

WHEN MARKETS TAKE A BREAK from the recent selloff, FX traders pick among USD, JPY and CHF as the safe haven currencies to sell. JPY is hit hardest on a combination of a bounce in Asia and European futures after the Jpns govt urged the Bank of Japan to ease the yen as part of an upcoming stimulus...

More disappointing US housing figures are unlikely to further boost USD on risk aversion because (i) prolonged US data deterioration bolsters the case for a fresh asset pruchases from the Fed; and (ii) of the latest upside surprise in German August IFO survey. While the latest 3-year high in...

ITS ONLY TUESDAY as JPY makes the transition from rising to soaring amid inaction from Japanese officials. Readers of this website have been warned of 81-80 in USDJPY since January before it was fashionable to do so. Cracks inside the FOMC about renewing QE, forecasts of a possible UK recession by...

AUSTRALIAN ELECTION DEADLOCK is having no particular AUD impact after a brief pullback in early Asian trade. We know markets don't like uncertainty, but such a close race was widely anticipated. Despite Gillard's plan to reduce Rudd's proposed resources tax to 30% from 40%, the tax remains a drag...

SATURDAY's AUSSIE ELECTIONS between Labours Gillard and Conservatives Abbott will be the closest Australia has seen since 1961. Although Gillard has proposed a watered-down version of the super tax on commodities from 40% to 30%, it remains unclear whether a Labour a victory will be negative for...

CANADA JUL CPI is the only data item of the day, further inflation softening could add to CAD selling especially in the event of prolonged declines in appetite. Watch the annual core CPI (exp at 1.8% from 1.7%). USDCAD 3-hr shows immediate TL resistance at 1.0420, a break of which seen extending...

DATA DOUBLE PUNCH HITS MARKETS as US jobless claims jump by 500K (highest since Nov), Aug Philly Fed -7.7 (lowest since Jul 2009) put life back in the yen as risk aversion intensifies (S&P500 -1.6% testing 1075). USDJPY testing 84.80, AUDJPY eyes 75.50, EURCHF loses 200 pips now testing 1.3180...

WATCH BoE MINUTES: Wednesdays release of the minutes from the August MPC meeting could add to GBP losses. The currency has been hit hard after Tuesdays unexpectedly weak July CPI (see earlier IMT for detail). The inflation story is a big deal. For the past 4 months, strong UK inflation was the...

US JUL INDUS PRODUCTION +1.0%, twice more than expected, with capacity utilization rising at its strongest pace since Sep 2008 at 74.8. YEN CROSSES seen making the best of the day as Japanese intervention is in focus. NZDJPY eyes 61.20, CADJPY seen at 83.20. AUD builds on gains after a neutral...

US RETAIL JUL SALES +0.4% as gains were concentrated in Autos and rising gasoline prices, but when exluding autos/gas/building materials, we get a 0.1% decline, which is the first since April. Equities will likely hover in and out of positive territory until the preliminary (14:55 GMT) release of...

YEN EXTENDS PULLBACK as markets stabilize, while CHF takes over from the Japanese currency, reminding us the Swiss safehaven is here to stay. The latest comments from Japanese officials about excessive yen moves have not been sufficiently potent as markets widely believed intervention will not be...

UPCOMING AUSSIE JULY JOBS REPORT (1:30 am GMT) may show further FUNDAMENTAL reason for the ensuing technical damage vs. USD and JPY. JUST LIKE LAST FRIDAY's CANADA JOBS data finally showed an unexpected jobs joss following series of robust employment figures, Australias July jobs figures could...

Why "Bearish Stochastic Divergences" are rare but effective? Here's Tuesday's AUDJPY chart alerting the divergence, and here's Wednesday's http://bit.ly/c5P153 A disappointing jobs report froom Australia on Thursday would accelerate those losses towards 75.50s......

BEARISH STOCHASTIC DIVERGENCE in AUDJPY as the cross stands vulnerable to prolonging losses on deepening risk aversion, especially after Chinas July imports were slower than expected. The daily AUDUSD chart shows a rare bearish divergence in slow stochastics, whereby the price action remains...

GBP & JPY are at opposite ends as sterling is the biggest loser in todays FX market flows following an unexpected decline in UK July RICS (House Price balance) to -8 from +9, the 1st negative index since July (and lowest since April 2009). JPY gains on slower than expected Chinese exports growth...

THE ONCE SOARING AUSSIE is now underperforming vs EUR & GBP, supporting my bias in favour of EURAUD and GBPAUD. The previous decline did not extend below the 1.43 and 1.70 support and upside remains intact. See HOTCHART in this website. Meanwhile, here's a look at the relationship between USDJPY...

BEST OF BOTH WORLDS FOR KIWI SHORTS US equities sell-off as jobless claims rise +479K, highest since April, adding to NZD losses against USD and JPY. Being a high yielding FX currency, NZD is among the usual victims of risk aversion, especially after higher than expected rise in NZ unemployment....

KIWI SLUMPS across the board after NZ unemployment rate jumped to 6.8% in July from exp 6.4% (vs exp 6.6%). My followers on twitter were alerted 75 mins before the release of the report with the following tweet: $AUDNZD longs worth a look ahead of tonight's Kiwi job figures. Cross already broke...

STOCKS EXTEND FRESH DOSAGE of pre-payrolls buying after US July ISM unexpectedly rises to 54.3 from 53.8; S&P500 will attempt to close above its 10-day MA of 1126 (not broken since May). AUSSIE & LOONIE SOAR against all currencies as wheat extends its 55% rally of the past 4 weeks amid worsening...

AUSSIE & LOONIE SOAR against all currencies as wheat extends its 55% rally of the past 4 weeks amid worsening draught in Russia. Aussies leadership is also boosted by the prolonged strength in energy and metals as the Federal Reserve opens the door for the possibility of renewed asset purchases...

Ashraf's interview on BNN discussing Europe, euro and Swiss franc Parts 1 & 2: http://bit.ly/aq7yeX Ashraf's Video Charts Analysis on Cantos making the case for GBP and EUR against the Aussie http://bit.ly/ 9vmIay ......

Ashraf's Video Charts Analysis on Cantos making the case for GBP and EUR against the Aussie http://bit.ly/9vmIay ......