Intraday Market Thoughts

Archived IMT (2010.09.01)

by Ashraf Laidi
Sep 1, 2010 17:56

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 measured by the Beijing and by HSBC, as well as Australias stronger than expected GDP figures. Markets ability to shrug the unexpected 10K decline in August ADP stems from the relief that Asian strength will stabilize the world economy from the risk of a double-dip in the US and possibly the UK. Australias Q2 GDP showed a bigger than expected 1.2% increase q/q and 3.3% (y/y, which was the highest since Q2 07 and Q3 10 respectively. AUDUSD tests 4-week trendline resistance of 0.91, a break of which would extend advances towards 0.9155-60. AUDJPY requires a successful break of the 77.70 top, before we can consider the breach of 79.00. The USD's QE2 woes wreiterate that AUD shorts have more to gain from AUDJPY than AUDUSD.


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