Tuesday, July 30

Asad Rizvi

Monday was quite a dull day, as market awaits release of batch of data's and monetary policy announcement by 3-major Central Banks this week. Activity is likely to remain thin and clueless unless release of economic indicators provide clearer direction.
Traders and investors are still confused by Fed Chairman's sudden U-Turn in his 2nd appearance soon after his June policy announcement on Fed's scaling down plan. June minutes clearly says that market should be informed/prepared prior to Fed's decision, which should be based on improve labour market condition and growth.
Based on economic performance, I will not be surprised to see more Fed members vouching for tapering, which will be known after the release of July minutes. Since there is no press conference after the release of MPS, there could more firework after release of FED minutes in August,
In its June press release Fed members was clear that to reduce uncertainty, it want to communicate in best possible manner that how it will adjust to it's asset purchases that will be purely based on economic developments and economic outlook. Some suggesting "Forward Guidance", a term, which is is frequently used there days by the all the Central Banks Chiefs. It was pioneered by Reserve Bank of New Zealand about 16-years ago. Basic idea is to tell or communicate in advance about the strategy that may help to reduce volatility. But it did not help on 1st instance when Bernanke started the tapering talk.
However, I would like to remind that in his testimony to congress that FED still plans to scaling down its massive bond purchase program this year. He has already set the mood, market is half prepared and I will not be surprised if more tapering hint is passed on that will help market to prepare for the coming event.
GMT 2:39 - EURO @ 1.3253 = Euro could hold around 1.3265-70 and on the rise if it fails to break 1.3290, we could witness fall and break of 1.3220-25 zones that should encourage for a test of 1.3200-05 levels. Or else 1.3320.
GMT 2:47 - GBP @ 1.5330 = Cable is struggling to gain pace and as long as it hold below 1.5350-60, see risk for a drop towards 1.5280 and may test 1.5250-60 zones. Break of 1.5390 should encourage for more gains.

GMT 2:51 - JPY @ 98.12 = Protection is around 98.40-50, as see risk for a test of 97.45, break would encourage for 97.10-20 zones. Or else 98.70.

GMT 2:54  - AUD @ 0.9161 = Aussie will struggle to move beyond 0.9185-95 levels for a test of 0.9120. Else 0.9210.

GMT 3:01  - GOLD @ $ 1329 = Gold during Asian and European session should struggle to move beyond $ 1333-35 levels for test of $ 1321-23 zones. Break $ 1308 risk for $ 1305 or $ 1301. On the up $ 1340 should hold or else $ 1351.

DISCLAMER : The commentary/information presented is not intended for trading purpose. The idea is to exchange views with the members/readers. Therefore, I accept no responsibility or liability for any losses incurred due to position taking.