Tuesday, October 01

Asad Rizvi

US Dollar came under renewed pressure, stocks are suffering, but gold that normally enjoys safe haven status did not benefit from shutdown tension. Senate has rejected the bill, which means shutdown officially begins at 3 GMT. It is expected that the default limit will be hit on October 17 if Congress fails to reach an agreement during this period. Though history suggest that USA has never defaulted on its debt.

Meanwhile, market volume is thin and trading activity is dull due to lack of direction. Italian uncertainty and weak German retail data was ignored by market waiting for US shutdown outcome. The situation in Europe is brittle and hence, further economic or political bad news could clobber European market. Euro surely looks vulnerable on the downside due to quite a few unfavourable factors..

Two major announcement will come from Japan and Australia. But Japanese news flash will be keenly watched, as market will be waiting to hear Japan's stimulus package, which is expected to provide relief to corporate sector. Australian Central Bank will take decision on interest rate, which is likely to hold, but its stance will probably remain soft.

GMT 2:55 - GOLD @ 1328 = In Asia and early Europe gold may have stronger tone and is buy on dips around $ 1323-25 levels, major support is around $ 1318-20 levels. On the upside break of $ 1335-238 zones is required for further gains or else gold will re-test support level.

GMT 3:00 - EURO @ 1.3527 = Euro could make small gains, but likely to exhaust around 1.3560 levels for a test of 1.3480-90 zones or else 1.3595.

GMT 3:05 - GBP @ 1.6233 = The current run-up should exhaust around 1.6250-60 levels, unless Cable moves beyond 1.6298, as GBP may re-test 1.6190-00 zones.

GMT 3:09 - JPY @ 98.29 = Break of 98.70-80 is required for a sharp move towards 99.90 or else risk is that if 97.50 surrenders, Japanese currency could make sharp gain. 

GMT 3:13 - AUD @ 0.9335 = Aussie is required to move beyond 0.9370-80 zones for a test of 0.9420-40 area or else risk id for drop break 0.9280 will encourage for a test of 0.9230-40 zones.

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.