Wednesday, October 30

Asad Rizvi

Ahead of FOMC decision on interest rate or prior to the release of statement by FED, market may prefer to stay quiet. After a torrid 1st two-weeks of this month, caused by US government shutdown, FED may not afford risk of tapering and would like to buy some more time due to distortion in economic activity, which will be known after the release of October economic data next month. 

FED statement could be of key relevance if it gives time table or hint of its scaling down plan. FED is faced with a difficult task, as tapering soon or delay in tapering, both will impact the market one way or the other. Since market priced in delay, due to recent debt problems, any hint of cut in asset purchase plan this year by the US Central Bank will have bigger impact, as we do not know that Bernanke may would like to start tapering before he says good bye, unlike his predecessor Allan Greenspan who left all the dirt for his successor.  

"Monetary Policy Statement",  What to watch............

-How much is FED concerned about Most Recent Economic Activity

-About recent release of poor Economic Data

-Language about Labour Market

-FED Language not too Dovish or Dovish

-Any Change in overall FED Language

-And more importantly, any hint of timing to begin Tapering

GMT 3:04 - GOLD @ $ 1343 = The crucial levels to watch is support at $ 1320 on the downside, break sees $ 1275-80 and $ 1362 on the upside, break of resistance level will encourage for a move towards $ 1404 on break of $ 1385.

During the day prior to trading should be around $ 1335 - $ 1350. Buy lows sell high. However, we are heading for a choppy day.

GMT 3:16 - EURO @ 1.3740 = Should hold below 1.3890, break of 1.3710 will encourage for 1.3685. Meanwhile, move beyond 1.3825 will encourage for 1.3940 and break of support level will see Euro losses extending towards 1.3620 zones.

GMT 3:21 - GBP @ 1.6040 = As long as 1.6080-90 holds, Cable could dip to test 1.5990-00 levels, fall could extend towards 1.5960-65 levels and has major support at 1.5880. Break of 1.6120-30 is required for more gains.

GMT 3:26 - JPY @ 98.15 = Japanese currency is required to break 98.50-70 zones for more losses, which looks difficult. however it needs to move beyond 97.70 for more gains to test 97.10 levels.

GMT 3:29 - AUD @ 0.9479 = Aussie failed to gain strength and has a challenge to hold 0.9420-40 levels too test and break 0.9550 for more gains or else 0.9380.

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.