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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...

ECBs WEBER ROCKS THE EURO with some hawkish comments after saying ECB discussions revolving around removing monetary stimulus around Q1 2011. Irish 10yr yield spreads over Germany back up to 390 bps. While the 1.2730-40 support has been broken intraday, a weekly break would signify 1.2550s. CAD...

STERLING AVOIDS DIPPING below its 200-day MA of $1.55 thanks to stronger than expected 1.1% rise in July retail sales as well as smaller than exp public sector borrowing. Subsequent rally in cable seen capped at $1.5680, a level that could be reached during afternoon London trade, but watch out...

STERLING RALLIED immediately after the BoE minutes showed Andrew Sentence continued to call for a 25-bp rate hike. While this was no real surprise, some players thought that perhaps Sentence would not dissent considering the emerging slowdown in inflation across the G7. Considering yesterdays...

GBPUSD RESTS RIGHT ON THE 2-month trend line support at $1.5565-70, following the all-important July inflation figures (see prev IMT). This is the GBPUSD equivalent of last weeks EURUSD trendline support, which held up at $1.3740s. GBPUSD does remain above its 200-day MA ($1.55), but has yet to...

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...

EUR BROADENING LOSSES, with USD accumulating the bulk of FX gains as JPY takes a backseat. ALL LEVELS IN THESE FOUR CHARTS http://chart.ly/n5k5k7 have been breached, with EURUSD vulnerable to a weekly close below 1.2770 (also 100-day MA) and GOLD vs. EUR further building on its WEEKLY GAPUP,...

NEGATIVE USD COMBO: The combination of weak US figures, dovish Fed rhetoric and improving Euorozone figures (PMIs) is proving increasingly detrimental for the US dollar. USDX is at risk of breaking below the 81.40s, marking the 50% retracement of the rally from the Nov 2009 low to the June 2010...

GBP GAINS across the board, completing the 7th rising week out of the last 8 weeks in a week when the Bank of Englands mixed messages regarding inflation became apparent to the public. Contrary to the rest of the G5, UKs inflation remains well above target, thereby fuelling expectations of a rate...

INSTEAD OF ONLY FOCUSING ON THE USUAL JPY and USD pairs, consider the ensuing moves in EURAUD, GBPAUD and GBPUSD. EURAUD on course for taking out 1.4570s, eyeing preliminary upside at 1.4670s, before key resistance at 1.4940-50. GBPAUD attempts to break above the 1.7390 trend line resistance...

UK July CBI Shot up to a 3-year high at +33 from -5.0 vs. expectations of 0.0, lifting cable back to $1.55 & dragging EURGBP below 0.84. A breach above 1.5520 is likely to extend gains towards 1.5570-80. EURGBP 4-hr stochastics showing negative cross-lover, suggesting 0.8330 to loom large. CADJPY...

German 10-YEAR YIELDS now surging to 2.77%, 1-bp away from breaking above the June high, which would be the highest since May. With US 10- yr yields standing at 3.02%, the yield advantage of the US has shrank to 25-bps. EURUSD nears 1.3030 target, followed by 1.3130. EURGBP faces ceiling at 7-day...

STERLING EXTENDS SELLING vs. USD and EUR as UK public sector borrowing hit a new record high in June reaching 21 bln, with net debt at 64% of GDP. UK July CBI Trends survey is due at 10 am GMT (11am BST) expected at -24 from -23. More data disappointment from the UK could see cable breach $1.5190,...

STERLING WEAKEST OF THE LOT shrugging the rise in risk appetite and the resulting gains in EUR. The rally in EURUSD seems more sustainable than the bounce in US stocks, especially after the US NAHB housing survey slopped to 14 in July from a downwardly revised 16. Last weeks forecast for a lower...

Yen strength is here to stay especially as the US dollar's safe-haven lustre is eroded by the worsening US data. ...

MIXED US DATA as US June PPI falls 0.5% vs. exp 0.1% decline, Empire State index WORSENS to 5 from 19.6 with broad declines in New Orders and Employment Index. The good news is the 21K decrease in jobless claims to 429K. WATCH US JUNE INDUSTRIAL PRODUCTION (13:15 GMT) which could show the first...

JPY IS STRONGEST OF THE DAY FOLLOWED BY GBP in early Thursday European trade as Chinas Q2 GDP growth slows to 10.3% from 11.9% in Q1. 13 hours after the Federal Reserve downgraded its 2010 and 2011 forecasts for US growth and inflation, Beijing publishes evidence of slowing growth and inflation....

OIL UNABLE TO BREACH ITS 200-day MA of 77.40,which coincides with the trend line resistance extending from the Mar 5 high thru the June 28 high. This also helps explain USDCADs support at the 1.0270 floor and subsequent recovery to 1.0370. Sticking with prior IMTs bearish call on EURGBP eyeing...

US JUNE RETAIL SALES -0.5% (vs exp -0.2% and prev -1.1%), ex autos -0.1% from prev -1.2%. Better but not good enough is one way to sum up these figures. Youd have to remove autos, gas and building material to obtain a positive retail sales figure. The 1.3% DECLINE IN JUNE IMPORT PRICES was the...

PBOC OVERSHADOWS FOMC as hardly a word is said about this week's FOMC announcement. Although China's central bank used the rationale of improved domestic and global economy for its decision to allow more flexible currency regime ie further strengthening, the US central bank is widely expected to...

It was important for yesterdays emergency budget to be positively accepted by the market, being that it was being held against a backdrop of concern about fiscal and sovereign debt woes globally, but especially in Europe. The budget presents the government with a great opportunity, more than...

Ashraf's video Charts Analysis at Spain's IBEX35 index & $EURGBP http://bit.ly/bK6yd9 A look at USD Index & Eurozone spreads & USD Index Monthly http://bit.ly/d1luEG......

USD DOLLAR INDEX LOOKING FOR ITS 7th MONTHLY CONSECUTIVE increase, the longest winning streak since the history of the 39-year old index. Watch Ashraf's appearance on CNBC earlier today http://bit.ly/bg7l7d EURGBP deepens losses after to the lows of Nov 2008 at 0.8220s, showing no respite...

A THIN DATA WEEK IN THE US will give way to Fed Chairman Bernankes Budget testimony to Congress on Wednesday, while US audiences will watch Bernankes interview with ABCs Sam Donaldson on Monday evening. EURCHF session low was 20 pips below our 1.3870 target in Fridays IMT. EURUSD is hit a fresh...

Mirror, mirror on the wall who's the ugliest of them all could have been the question directed at the pound and the Euro over the past 18 months, as they battled it out for the dubious distinction for the crown of least wanted currency in their own battle of the uglies. It now appears that...

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...

EURUSD LOSES GROUND to join the commodity currencies on the downside after German IFO sentiment survey slipped in May to 101.5 from 101.6 vs expectations of a rise to 102. NIKKEI-225 GAPPED DOWN 240 pts on Friday following its 300-pt Thursday decline. Dow-30, S&P500 & Nikkei-225 all retested the...

DAMAGED GOODS is the state of the commodity currencies as their selloff intensifies primarily against JPY, USD and to lesser extent the euro. What started as a shapr selloff in AUD is now broadening into CAD and NZD. We continue to target 0.8140 and 0.80 as prelim AUDUSD targets, followed by 0.78...

USD 3-MONTH LIBOR REACHES 0.48%, doubling the levels from the November lows, as it reflects the escalating cost of USD-funding for US and non-US banks. Lack of trust among banks as well as liquidity difficulties are the main culprit. Fed has responded by providing USD-funding through FX swaps with...

Last weeks EURUSD break below the 1.2700 area, if confirmed on a monthly close could have potentially bearish consequences for the single currency from a technical standpoint. Given the unprecedented size of the bailout from an EU perspective, as well as an IMF point of view, the market...