Intraday Market Thoughts

Archived IMT (2010.10.15)

by Ashraf Laidi
Oct 15, 2010 14:00

THE COMBINATION OF BERNANKE calling for Further Action, US retail sales showing a robust 0.6% and the NY Fed manuf index shooting to 15.7 from is likely to extend USD selling. The data is good enough to maintain risk appetite on an upward trend (especially due to stellar earnings from Google--GOOG seen opening near $600 after rocketing from $540s). FX traders may have a fresh excuse to push USD lower upon the latest round of the Feds PERMANENT OPEN MARKET OPERATIONS (POMOs) due at 11 am EDT (15:00 GMT) involving the purchase of about $3 bln in treasuries. Friday POMOs have usually proven negative for USD. And when we recall that USDX always ended aggressively lower in each of the last FOMC meetings, there is not much ground for USD rebound. AUDUSD briefly regained parity. Going back to that Sep 10 trend line support in EURUSD, the pair NEEDS TO CLOSE THE WEEK ABOVE $1.40 to avoid a near-term selloff and extend to the next target at $1.4210. CAD gained some ground after strong machinery data. GBPCAD still eyes 1.6180 & 1.6250 while USDCAD seen capped at 1.0125, followed by 1.0180s. Renewed drop below parity remains in the works--0.9970


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