Asad Rizvi
Yesterday's move in the foreign exchange market that weakened US Dollar was quite surprising after the reports emerging from China that its economy is contracting. Australian Dollar took thumping, but other markets did not react, instead gold made surprise up move. Though data released from Euro zones was encouraging to a certain extent, as growth in the manufacturing and service sector in France showed minor improvement, because in recent times, it's economy had some turbulent moments. German PMI surging to 32-month high once again encouraging.
But the move in FX market was excessive due to mixed signal coming from other parts of Euro region, as Spanish unemployment rate continue to rise. USD got further thrashing in US session after the release of US PMI number that fell to 53.7 in January. Although Home sales rose by 1 pct in December, helping 2013 sales to a 7-year high, which was ignored.
There is no reason to believe that FED will re-consider its tapering strategy after fall in US PMI numbers. They surely have a plan and a target and if have decided to further reduce the tapering amount then nothing can stop them and I do believe that do have a plan. If FED decides to make second time reduction announcement then this should be a message and disaster for gold and bond market.
This a joke that gold is surging on hopes that India will lift its import band on gold. India may delay its gold import plan because this week it had already announced to withdraw its currency notes issues before 2005. This will become effective from April 01, 2014, which will help to curb black market and corruption. This is big news and market is yet to react. Do not forget that smuggling in this part of the world is very common and gold purchase against old currency notes will become difficult. And most interesting part is that gold that would always rise due to China's economic performance is gaining despite cracks appearing in Chinese economy.
Conclusion, this is mini-trap set before FED meeting, so that gold does not fall before FED meets and if FED does not announce 2nd tapering this will give another opportunity for gold to surge. My further reading is that gold will fall next week due to profit taking and selling by nervous weak buyers that will try to offload their holdings. Any increase in tapering amount will push gold to new lows.
GMT 3:31 = GOLD@ $ 1260.60 = Likely to hold around $ 1253-55 for another upside attempt, break of $ 1265-68 would risk for a test of $ 1275 zones. However, fall below $ 1245-48, will easy upside rally.
GMT 3:40 - EURO @ 1.3685 = This upside rally should be completed around 1.37 levels, as only break above 1.3750 could be threatening. Break of 1.3640-45 will encourage for 1.3625.
GMT 3:45 - GBP @ 1.6631 = Cable has reached a dangerous levels and looks threatening around 1.6650 and is most likely to exhaust. A fall below 1.6565 will encourage for 1.6520. Upside break will see a push towards 1.6680-90 zones. Prefer picking top to sell.
GMT 3:48 - JPY @ 103.30 = JPY needs to move beyond 103.60-80 zones or else Yen gains will push it towards 102.90.
GMT 3:53 - AUD @ 0.8764 = The fall should hold around 0.8720-40 levels for a move towards 0.8780-90, break will encourage for 0.8810 or else 0.8705.
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.
GMT 3:31 = GOLD@ $ 1260.60 = Likely to hold around $ 1253-55 for another upside attempt break of $ 1265-68 would risk for a test of $ 1275 zones. However, fall below $ 1245-48, will easy upside rally.
ReplyDeleteEURO @ 1.3685 = This upside rally should be completed around 1.37 levels, as only break above 1.3750 could threatening. break of 1.3740-45 will encourage for 1.3625.
ReplyDeleteGBP @ 1.6631 = Cable has reached a dangerous levels and looks threatening around 1.6650. A fall below 1.6565 will encourage for 1.6520. Upside break will see a push towards 1.6680-90 zone
ReplyDelete
ReplyDeleteJPY @ 103.38 = JPY needs to push beyond 103.60-80 zones or else Yen gains will push it towards 102.90
AUD @ 0.8764 = The fall should hold around 0.8720-40 levels for a move towards 0.8780-90, break will encourage for 0.8810 or else 0.8705.
ReplyDeleteAUD @ 0.8695 = buy around 0.8685-95 = stop loss 0.8640.................
ReplyDeleteHello Sir,
ReplyDeleteGOLD: Sir, is it preferred going long now for 1265-68?
Thanks
below 1260...........
ReplyDeleteOK Sir, Thank you
ReplyDeleteGOLD @ $ 1259.80 = Preferred entry level is $ 1257........
ReplyDeleteGBP @ 1.6660 = Pick top to sell around 1.6660-70. Stop Loss 1.6695...........
ReplyDeleteGOLD: Sir, preferred buying level 1257 - view unchanged?
ReplyDeleteThanks
Fails, try to understand my strategy.........
ReplyDeleteWhen you or any other person ask for a trading levels.
I make a commitment when I respond to a query.
Take yesterday's example, you took a position on gold around $ 1236.40 and then informing me. My response was apply Stop Loss, because i was nor comfortable with your position, which was not favored by me. But by responding other take that as a signal.
So better wait for my post or else view is unchanged.
Hope this will help you and others..................
Do I have to tell you again my view on gold ?
No Sir, it's clear now. Sorry for the confusion for others.
ReplyDeleteSorry Faisal, I was away for Friday prayers.
ReplyDeleteDon't feel sorry. The reason for this communication is to make best of this podium. How would it benefit me or how can I be happy if one of you is at a loss. I am trying to do my best in everyone's interest. The idea is not to humiliate or make fun, but to get best out of me so that all can benefit.
All the best
Thanks
I certainly understand Sir,
ReplyDeleteThank you once again
JPY @ 102.90 = Profit should be taken around 102.80-90..............
ReplyDeleteHi sir
ReplyDeleteAs per your weekly YEN view.. almost YEN is close to these levels (102.20) ..
Do you see Yen strength continue in coming week till FOMC aleast?
Thanks
GOLD @ $ 1259.80 = One problem that I see right now is that gold is struggling to move beyond $ 1260-62 levels, failure means it could dip to test $ 1255-56. So better make exit strategy with small profit, if fails to move beyond.........
ReplyDeleteNo, two factors are supporting Yen right, which I always tell you guys to watch...
ReplyDeleteNIKKEI's fall & US Bonds Yield gaining, both support Yen............
We are close to low,s now.................
I am sure you are Long Yen ...............If I am correct take profit.........
GOLD @ $ 1260.50 = Take profit before NYK becomes active................
ReplyDeleteShit !
ReplyDeleteI left office for home & in 20 minutes this rally took place..............
well i didn't miss :D
ReplyDeleteWell, gold and Yen rally is caused due to melt down of Emerging markets. Turkish Lira, South African Rand, A Pesso, INR plunged.
ReplyDeleteThis is safe haven buying...................
GOLD: Sir, do you mean we should go long from here now?
ReplyDeleteThanks
JPY @ 102.10 = Anyone willing to take 100 pip bet should sell JPY..........
ReplyDeletei am in
ReplyDeleteGOLD : No, suggest wait............
ReplyDeleteSir
ReplyDeleteLong GOLD... TP 1275 Ok ?
Thanks
long from 1262
ReplyDeleteEURO @ 1.3725 = Of you have book profit on your morning position Sell around current levels. stops 1.3770...........
ReplyDeleteJPY Sell is preferred around 101.80-00. watch the move before you enter........
ReplyDeletePotentially Gold could still test $ 1275-80 levels, but if Dow Jones recover and Bond Yields ease Gold & JPY could fall sharply....................
ReplyDeleteNo trade is suggested. Basic idea is to share experience/knowledge......
There are not written rules, but there are some on the important events that are taken into consideration............
ReplyDeletePlease read "These" instead of There...............
ReplyDeleteGBP @ 1.6580 = Book your profit around 1.6570-80....Cheers
ReplyDeleteAUD @ 0.8695 = Close AUD position..............
ReplyDeleteTry buying GBP around 1.6520-30 levels, Stop Loss 1.6480, as we are also witnessing cross correction against Euro
ReplyDeleteGBP @ 1.6525 = Stay away.................
ReplyDeleteCurrently we are holding only one position, Euro sale @ 1.3725............
ReplyDeleteEURO @ 1.3678 = Book your profit around 1.3672-78.....Cheers
ReplyDeleteOk pals, it has been a good day and fine end to the week.
ReplyDeleteI avoided taking risk today due to Choppy market condition.
I think next week uncertainty will prevail..................
Cheers until next week................