Asad Rizvi
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.
Today
Monday is 7th day and yet there is hardly any sign of reaching a
deal to raise debt ceiling. This debate especially regarding enhancement of
debt ceiling limit is likely to stretch until last minute (Oct 17), as both the
political parties will try to take political mileage on the issue.
Delay
means more bad news for US economy that will depress growth. In my earlier note
last month, soon after the last FED FOMC meeting, I clearly pointed out that
FED sensing trouble on debt ceiling issue refrained from early tapering and
have preferred to drag until the deadline ceiling date is extended. Of course
failing to reach an understanding by the deadline would mean default is
unavoidable that will lead to more uncertainty. I have mentioned several times
that the President of USA has the option of applying 14th amendment
that allows government to borrow.
More
importantly as long as the differences are not sorted out, release of some the
US economic data could be delayed, some may flow and some may not, as Bureau of
Labor Statistics (BLS) closed their web-site that publishes regular data
announced that BLS will not collect data, issue reports and will not respond to
queries. They will only be able to update its web-site when Federal Government
resumes operations.
However,
since the ongoing shutdown does not does affect Federal Reserve, its office
will remain open, this means FOMC minutes will be released as per schedule. The
key market moving factor will be the language used in the report, as several
Federal Reserve officials in their various speeches have hinted that tapering
was a close call. Hence, Dovish tone will further weaken the Greenback, which
means sell-off will be seen and if Hawks have been able to succeed in gathering
momentum it should help US Dollar to recover.
Bottom
line is that talking on anything else makes little sense, as market will remain
focused towards development on US debt ceiling issue, unless settled.
GOLD @ 1310.15 = Gold will
remain choppy though struggling to make gains but, there are couple of favorable
factors that should help gold to recover, as lingering of US debt ceiling
matter and possible Dovish FOMC tone would support gold. However, any strength
should be temporary, as market has accepted the fact that tapering could be
delayed, but is unavoidable. And do keep a close watch on talks about possible
gold sale or swap by FED from its gold reserves. Though FED holding is around
8100 metric tons of gold worth rough $ 350 billion, any such talk could bring
misery for the Yellow metal.
$
1290-95 is the support level, if breaks the fall could extend up to $ 1260-65
zones, with major support at $ 1232. I am expecting a move towards $ 1322-25,
break risk for test of $ 1345-50 levels, fails to hold the run-up could extend
up to $ 1375-80. But market will remain choppy.
EURO @ 1.3553 = Bias should be
on the upside, as support 1.3420-40 should hold, only break risks for 1.3380. On
the upside needs to break resistance around 1.3670-90, but small correction is possible
before another upside attack for 1.3725. Range for the week 1.3350 – 1.3750.
GBP @ 1.6006 = Cable lost its
upside momentum and now should hold around 1.5950-70 zones or else we could see
deeper correction extending up to 1.5870-00 zones. Challenge is to crack 1.6090-00
levels for 1.6150. Range for week 1.5850-1.6190.
JPY @ 97.46 = The strength of
Japanese currency will continue to dominate as long as US debt ceiling uncertainty
looms. However, minutes of FOMC could add some spark if the tone of report is
Dovish. Japanese currency has support around 98.10-20, if surrenders further weakening
and a move towards 98.95 are possible. There is high probability that despite
all odds Yen could make in the later part of the week. Break of 96.70 is required
for a test of 96.1-10-20 zones. Range for the week 95.70 – 99.25.
AUD
@ 0.9429 = Tone of Aussie will remain strong as 0.9340-50
support level should hold for a move towards 0.9480-90, break will encourage
for a move towards 0.9550-60, or else 0.9280. Range for the week 0.9270– 0.9580.
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.
sir shall go long aud and gold??
ReplyDeletePrfer Long Aud around 0.9370-80 & Gold around $ 1308
ReplyDeleteGOL:D @$1309 = Could still test $ 1304-06 before up...........
ReplyDeletesir what about gbp where to go short!!
ReplyDeleteI may consider around 1.6080-90.......
ReplyDeletehi sir
ReplyDeleteGBP and EURO long positions ... where to put SL
Thanks
Not sure about your buying levels, but key is 1.3530 and 1.6010 for 1.3598-05 $ 1.6080-90
ReplyDeletehold buy gold till us
ReplyDeletewhat do mean you did not book profit around $ 1313.....
ReplyDeleteif not square around $ 1312 as another fall is possible.......
sir any selling level for gold!!
ReplyDeletesir shall go short gbp here!!
ReplyDeleteGOLD @ $ 1318 = Gold should hold around $ 1313-15 for test of $ 1322-25... or else $ 1308
ReplyDeleteGOLD @ $ 1323 = book your profit around $ 1323-26............
ReplyDeleteGBP @ 1.6065 = Ok hope you guys took your Cable profit and picked top around 1.6090-95. Do book you profit on dip around 1.6055-65.
ReplyDeleteI am not keen to make too many comments and confuse you with your positions in uncertain market condition.......Cheers
GOLD @ 1324 = Likley to top around $ 1324-27 levels for $ 1315-18. Upside risk if breaks $ 1332
ReplyDeleteOk pals, I have to early as I have an appointment.
ReplyDeleteCheers until tomorrow...........