Tuesday, December 10

Asad Rizvi

After going through statements by 3 - FED officials, I have a strong feeling that taper announcement after Dec 17-18 FOMC meeting looks like a good possibility. I think prior of official announcement FED officials will refrain from giving nod individually, as FED decision to reduce its bond purchase will be a big move that has huge risk at various levels  that should be carefully handled.

Last night, Fed's Bullard in his speech has hinted about the possibility of small taper to recognize improvement in labor market. Another FED official Jeffery Laker spoke to discussing tapering in its coming policy meeting next week. Similarly FED Dallas President Richard Fisher, never an ardent supporter of third time Quantitative easing having good sense about the risk of unnecessary inflating FED's balance sheet, which is a risky proposition spoke of withdrawal of its bond purchase plan, as he seemed convinced that there is plenty of cheap liquidity available. Out of three FED officials, Bullard is the only voting member, but others carry equal weight and could be delivering FED's message.

Surely all eyes will be glued towards next week's FOMC meeting, as there will be less support from limited data this week, as release of Retail Sales on the only major US data. 

While, I am getting nervous with the Euro's move, which is heading upward against all odds. The Euro-zones economy is at risk. more LTRO money will be required to support the market, the threat of negative deposit is still looming over the heads and the US economy has flipped on the right direction. With all above factors I will not be surprised to see sharp reversal and one good reason may set the trap.Similarly Pound has entered a dangerous zone and finally Japanese Yen could be the surprise beneficiary. 

GMT 3:03  - GOLD @ $ 1239 = Gold may briefly hold above $ 1235 levels and break of $ 1242-43 may encourage to stretch toward $ 1245048 levels. However, there is risk of big fall and break $ 1228-30 could trigger down move.

GMT 3:07 - EURO @ 1.3760 = Sell Euro around 1.3774-84 with Stops 1.3810 for 1.3720 or 1.3690-00.

GMT 3:13 - GBP @ 1.6452 = Cable should top around 1.6465-70, I would not hesitate to sell with Stops 1.6490. A move below 1.6410-20 is required for more losses or else could re-test and break day's high.

GMT 3:18 - JPY @ 103.22 = There are quite a few support levels for Japanese currency 103.50 may not be easy to surrender, break will find another one around 103.80. On the downside JPY needs to push beyond 102.70-80 for more gains. 

GMT 3:26 - AUD @ 0.9107 = I would give some more margin for correction and prefer waiting to sell around 0.9140-50. Should stay below 0.9190. On the downside if support 0.9080 breaks, risk for a drop towards 0.9050-60 zones. 

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.