Tuesday, October 22

Asad Rizvi

After some anxious moment seen during last couple of weeks, as US shutdown story was dominating the market, on Monday market opted for a quieter trading session, as US government successfully managed to temporarily avoid default. Market is now trying to access the damage caused to the economy by the economic unrest.

Today's jobs data will not depict the correct picture of the economy as the data is of prior month that was suppose to be released soon after the month end, but the delay in announcement is the result of closure of government offices as per rules. But anything beyond expectation could drive the sentiment accordingly, which means poor data will support talks of continuation of easy monetary policy and similarly strong data will favour tapering talk.

My feeling is that tapering this year could still be a possibility, as Bernanke will be under severe pressure after Paul Krugman calling Alan Greenspan "the worst ex-Central Banker in the world". This is because current FED Chairman is about to retire and he may not want to end up with a bad note after all the hard work and may not risk his credibility, which means unless payroll data is too weak, I will not be surprised if FED opts for scaling down before Bernanke leaves. Lot of people are betting on tapering delay because they expect this months (October) jobs data due after 1st week of next month will be show economic decline, what we must not forget is that there are lot of economic hurdlers in the coming months, which means more misery for US economy. Therefore, if there is going to be a delay on FED decision of its bond purchase then its not the matter of few months, it is going to be a long delay to suit the condition.

GMT 3:02  - GOLD @ $ 1314.50 = Prior to US jobs data Gold is likely to hold around $ 1307-10 levels and break of $ 1320-22 could push it towards $ 1325-27. However, the levels o watch is $ 1303 on the downside if breaks could see a fall towards $ 1280-85 and similarly break of $ 1330 risks for a test of $ 1345-50 zones.

GMT 3:12 - EURO @ 1.3664 = Euro should hold around 1.35620-30 levels, but needs to break 1.3685-90 for a possible test of 1.3502-07 zones. However, unless breaks 1.3740-50 levels, I do not see much gains or else will be heading for1.3875. Meanwhile on the downside support is at 1.3540.  

GMT 3:17 - GBP @ 1.6122 = Cable could find top around 1.6150 and needs to surpass 1.6180-90 levels for bigger gains. However GBP has support around 1.6030-40 levels. Break risks for 1.5970. 

GMT 3:23 - JPY @ 98.30 = Japanese Yen has support around 98.50-55 levels and unless 98.80-90 surrenders, the Japan's currency has the ability to make comeback and could challenge 97.50-70 zones on break of 98.05 or else 99.40.

GMT 3:33 - AUD @ 0.9646 = Aussie would continue to struggle to surpass 0.9680-90 levels and could dip to test 0.9600-10 zones, but needs to break 0.9570-80 for more losses or else 0.9720.

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.