Tuesday, Dec 17

Asad Rizvi

The pattern in the financial market suggest uncertainty and nervousness, as the direction remains unclear. It is difficult to judge FED's monetary policy stance based on release of data's this week. The market behaviour does not reflect true picture, as opinion is still divided and after the the most recent release of Payroll and Jobs data, FED officials have been less vocal on the subject. Therefore it is tough to get the sense or feeling about the direction.

Everyone, has its own assessment about FED' next stance, as the opinion is still divided about the timing of tapering. Some based on economic reasoning and few of them are dependent on their hunch feeling. Many argue that tapering is priced in, but common sense will tell us that draining out of liquidity on regular basis will have sever impact on the overall financial system that can spill over on the global financial market due to strings attached. Unless FED announces that its one time tapering or FED will see wait to see the market reaction before its next withdrawal/unwinding. 

This may not be as easy as one may think, but if we make an overall assessment of US economic performance, which was the core argument or condition by the FED members during their speeches, then there is no reason to delay scaling down of bond purchase by FED. 

Meanwhile, Euro-zone PMI did reflect better result, but unfortunately it was once again due to the strength of German economy that is pulling the engine versus others that remain disappointing, which is not a very healthy sign. Today's European CPI and Labor cost data will give some hint of inflation in the Euro region. German ZEW could once gain some lead to Euro.  

    

GMT 03:11  - GOLD @ $ 1241 = In Asia and in early Euro, Gold will find support around $ 1235-38 zones for a move towards $ 1246-48 zones. Break of $ 1230 risks for more losses. Beyond $ 1255 will threaten for more gains.

GMT 3:17 - EURO 1.3766 = We witness a very similar pattern as of yesterday if holds around 1.3740 and see a possible break of 1.38 for 1a test of 1.3718 zones before easing Or else 1.3690-00.

GMT 3:21 - GBP @ 1.6313 = Buying interest will be seen on dip around 1.6280, but requires to crack 1.6340 for 1.6270, which looks tough and could dip again. However. support is at 1.6240.

GMT 3:25 - AUD @ 0.8935 = May find resistance around 0.8950-60 for a test of 0.8900-05, break risks for another 20 pip drop. Good selling interest will be seen if move towards 0.90 levels.

GMT 3:32 - JPY @ 103.06 = Yen should find support around 103.20 levels for 102.70-75, break risks for test of 102.45 or else else test of 103.45.

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.