Friday, September 20

Asad Rizvi

I hope this is not politics and more to do with the economy that Ben Bernanke's decision to delay taper is for economic gains rather than anything else. Warren Buffett is out in the streets supporting Ben and so will large financial institutions/hedge funds and others to soon follow in support of Bernanke. The so called Guru's have started to praise Ben's delay tactics. Basically easily monetary policy, tapering delay and liquidity injection helps all the borrowers enjoyed/enjoying free available money for years. 

In true sense, nearly USD 2.75 Trillion liquidity injected through printing of money does not filter down into the economy, as the cheap money made available by FED mostly helps to fill the odd gaps such as mis-matches, improves non performing loans position, which shows healthier balance sheet without an effort. Complete withdrawal of funding would surely lead to global financial collapse, but constant liquidity injection for years without increase in revenue is neither healthy that ultimately leads to higher debt. Continued US Central Bank's asset purchase policy is not cure for the economy, as it has its own pros and cons and delay will lead to to more future chaotic situation and therefore, the sooner tapering takes place, it is better for the economy, which would be step in the right direction. Hopefully, the decision by FED to refrain from September tapering is temporary. 

Meanwhile, yesterday's release of US economic data was overall satisfactory and as we have approached weekend, market is still trying to digest the tapering delay decision by Fed and in the absence of any major economic data today and Germany's election due this weekend, traders may prefer stay quite and choose with their trades. 

GMT 3:19 - GOLD @ $ 1365= Gold should hold around $ 1370 and any rise beyond does not look threatening for a test of $ 1352-55 zones, But needs to fall below $ 1350 for $ 1335. On the up it needs to clear $ 1378 for % 1385.

GMT 3:25 - EURO @ 1.3537 = Euro may find top around 1.3560 -70 levels for a gradual move towards 1.3480-90 on break of 1.3502. Support 1.3430-40 should hold or else 1.3590-95 before down again.

GMT 3:28 - GBP @ 1.6042 = Cable should find resistance around 1.6060-70 for a move down to test 1.60's for a possible test of 1.5980-90 zones or else 1.690-95 before down again. 

GMT 3:32 - JPY @ 99.30 = JPY should briefly hold around 99.00-10 levels or could test 98.70-80 before easing. However, only break of 99.60 would challenge 99.85-90 levels. 

GMT 3:35 - AUD 0.9454 = has strong support around 0.9380 that should hold for another attempt towards 0.9480-90 levels, but move beyond 0.9510 looks tough to crack.

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.