Monday, Dec 30 - Jan 03

Asad Rizvi

I think after watching impact of market moves in thin condition on Friday that I have frequently warned you all may have realized that how difficult it is to trade currencies in such volatile conditions. This is why it is extremely important to apply Stop loss or to stay away because from abnormal trading conditions.

I have decided not make hasty comments this week, as market condition will remain uncertain/choppy due to factors beyond anyone control except for the Big Daddies that may once again dictate the market.

You may have noted that in my last hour comment I said “ EURO & GBP could make another upside attempt before exhausting and may see sharp drop”. This is what my experience tells me about the risk of trading in thin market, especially during year end.

Therefore, I am simply putting down the technical levels for guidance and will inter-act with you, as I do during the day instead of analyzing the fundamental side, which is ineffective due to holiday season and in the absence of major trading players. We could witness such moves for few more weeks until traders are on their seats.

GOLD @ $ 1212.90 = Gold gains could be possible for next 2 or 3 days, but may struggle to move beyond $ 1225-30, as downside risk will remain intact, therefore selling interest should dominate. Break of $ 1192 will encourage for a test and beak of $ 1182 for $ 1169.

EURO @ 1.3748 = Weekend surprise up move gave hint of excessive volatility in year-end thin market condition, but the move is a sort of guideline for possible upward direction before US Dollar dominates. The confidence in European currency is largely due to better economic condition and improved fiscal condition, positive surplus number is adding to the confidence level. Therefore, unless there is further deterioration of economic condition in the Euro-zone region or there is bigger impact of US economic gains, Euro may find buying interest on dip.

Euro has protection around 1.3620-40, which may not be easy to surrender and if holds we could see another upside test of 1.3875 and break risks for more gains. On the downside, if support break, risk for test of 1.3580 will increase, but Euro could potentially bounce back.

GBP @ 1.6375 = Cable has strong Support around 1.6295-05, which may not surrender for another upside move. Break of 1.6460-80 risks for another test of 1.6570-80 levels. If support level surrenders GBP could test 1.6240 before another upside attack.

JPY @ 105.15 = Though trend for Japanese currency points to weaker Yen, but needs to clear 105.60-80 for 106.25 or else correction is possible. However, break of 104.10 will see more gains for JPY that could stretch up to 103.50-80 before easing.

AUD @ 0.8870 = Aussie needs to clear 0.8960 for test of 0.9020-50 zones, which is not a favorable move, as break of 0.8770 is required for deeper fall towards 08710.

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.