Tuesday, October 08

Asad Rizvi

As the shutdown days are being extended without any signs of compromise, the temperature of the market has started to increase because the news from Washington is not very encouraging. Apparently the two leaders from Democrats and Republican are in no mood to negotiate, as Obama thinks he has sufficient votes in Congress to pass the bill to raise debt limit, but Boehner said that he would not table debt limit bill unless they were linked to broader deficit talk. 

This weekend could be crucial, as Congress will on vacation after October 11, which means if not settled by that time, market would react. I have already pointed out in my past and weekly post that prolonged shutdown would badly hurt US growth and we could see spillover effect spreading over other economies as well.       

Overall market is nervous, stocks are shaky, US Dollar is soft, focus is on safe heaven currencies JPY and Swiss Franc. Gold has also gained strength, but I still believe that the Yellow metal will be wobbly, as I am expecting occasional profit taking during the days on any sharp rise. I think with the passage of time no one is bothered about the US economic numbers. Everyone is keen to hear about developments in USA, which will dampen the sentiment unless there is a clarity. 

GMT 2:50 - GOLD @ $ 1326 = In Asia I am expecting $ 1320-22 to hold for test of $ 1330-1332 zones before minor correction before another upside attack possibly towards $ 1335-38 levels. But do watch out for a test of $ 1315-17 zones. Gold will be choppy. 

GMT 2:56 - EURO @ 1.3568 = The key level during the day is 1.3535-40 if holds we could see another upside test of 1.3600-10 zones or else Euro could test 1.3510.

GMT 3:01 - GBP @ 1.6085 = May not be easy to crack beyond 1.610-15 zones. suspect may fizzle out before reaching for 1.6040. If the fall is sharp could extend up to 1.5990-00. Or else 1.6130-40.

GMT 3:05 - JPY @ 96.83 = Could test 97.10-20 zones, but requires to break 97.50, which looks difficult as see risk for a test of 96.50-60 levels.

GMT 3:08 - AUD @ 0.9420 = Failure to surpass 0.9440-50 would see a drop towards 0.9380-90 zones, but should hold 0.9350 for gains or else 0.9470.

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.