Asad Rizvi
FED minutes and encouraging reports from the private sector (ADP) that jobs condition in USA is is getting better did not impress the market, as market could be trying to digest the news and waiting for Friday's Non Farm Payroll report for more clarity. FED language clearly depicts that its committee members are now convinced that bond purchase is not doing the trick of helping growth and is more of a burden as it inflates FED balance sheet, which means it is a costly and risky affair against a very heavy price. Fed minutes also gives a hint that the confidence levels about the overall economic outlook has certainly improved.
One big reason for the confidence in US Bond market, which is largest in size is that it is refusing to accept the fact the FED will completely unwind, as quite a few major players still believe that FED cannot afford end of its bond purchase plan that could lead to financial market collapse because of liquidity crunch.
In my humble view, it is because of the experimental size of tapering, which is tiny at moment to prepare and have better sense of the market. When FED says that the impact of benefits is slipping over time, it clearly hints that bond purchase is no more affordable proposition and since it is linked to economic factors, a good data on Friday or later could do lot of damage and shake the confidence and so will, as the size of tapering get any bigger. It is surely tough to defend 10-year US bond yield of 3-pct or below that could easily surge with the passage of time by another 50-100 basis point, as bearish sentiments will gradually dominate and a move of 25 basis point will become acceptable to market.
Two major events of the day is monetary policy announcement by BOE and ECB, which is unlikely to change rate, but some of the developments is UK suggest that market should keep an eye on the size of BOE bond purchase amount. ECB has a tough task ahead due to German growth is not helping the region to recover as a desired pace and low inflation is now a real cause of worry. ECB may not act, but Mario Draghi very good at choosing his words could use his artistic language to pamper the market and may sound Dovish and talk of liquidity injection. Therefore, a small cut in Refi rate and talk of easing will push Euro further down, but just a press talk will encourage buyers to European currency.
GMT 3:14 - GOLD @ $ 1226.90 = In Asia again $ 1222-23 should hold, as only break of $ 1218 could be threatening. However, suspect any move beyond $ 1233-35 levels, as selling will dominate on the up. I will not be surprised to see break of $ 1215-18 in NYK for possible test of $ 1202-05.
GMT 3:37 - EURO @ 1.3580 = We could be heading for another choppy day. I am expecting Euro to hold below 1.3620 levels until NYK. Break of 1.3540-50 zones will encourage for a test of 1.3525 levels, which should hold or if surrenders 1.3490 zones could be tested before a bounce back occurs. On the up, 1.3660-70 is the level to watch that could be tested later in NYK session before down again.
GMT 3:41 - GBP @ 1.6450 = Bullish condition will prevail until 1.6320-30 surrenders. However, support 1.6390-00 should hold for a possible test and break of 1.6480 or 1.6515.
GMT 3:45 - JPY @ 104.90 = Jpy is looking for direction a break of 104.60-65 could see more gain towards 104.30-40 levels. However, a move beyond 105.250-30 could extend losses.
GMT 3:48 - AUD @ 0.8880 = This move that I have talking since last couple of days happened. This dip could extend towards 0.8835-50 zones, but caution is suggested if seen, as Aussie has potential and could test 0.8910-20 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.
GMT 3:14 - GOLD @ $ 1226.90 = In Asia again $ 1222-23 should hold, as only break of $ 1218 could be threatening. However, suspect any move beyond $ 1233-35 levels, as selling will dominate on the up. I will not be surprised to see break of $ 1215-18 in NYK for possible test of $ 1202-05.
ReplyDeleteEURO @ 1.3580 = We could be heading for another choppy day. I am expecting Euro to hold below 1.3620 levels until NYK. Break of 1.3540-50 zones will encourage for a test of 1.3525 levels, which should hold or if surrenders 1.3490 zones could be tested before a bounce back occurs. On the up, 1.3660-70 is the level to watch that could be tested later in NYK session before down again.
ReplyDeleteGBP @ 1.6450 = Bullish condition will prevail until 1.6320-30 surrenders. However, support 1.6390-00 should hold for a possible test and break of 1.6480 or 1.6515.
ReplyDeleteJPY @ 104.90 = Jpy is looking for direction a break of 104.60-65 could see more gain towards 104.30-40 levels. However, a move beyond 105.250-30 could extend losses.
ReplyDeleteAUD @ 0.8880 = This move that I have talking since last couple of days happened. This dip could extend towards 0.8835-50 zones, but caution is suggested if seen, as Aussie has potential and could test 0.8910-20 zones.
ReplyDeleteGOLD @ $ 1227 = There is a risk that gold may fails to move beyond $ 1230-32 and could dip to test $ 1220-22 zones...........
ReplyDeleteEURO @ 1.3610 = The expected up move has occurred, suggest long Euro should book profit around 1.3615-25 zones. & pick top to sell with Stop Loss 1.3660.
ReplyDeletegbp data came negative service still goiong up and trade balance came same still you see up ward momnet.. and boe earlier said strong gbp hurt recorvery..?
ReplyDeleteMy dear pd, my humble suggestion is that do not fight against trend. The data will not have much impact on economy. Better employment condition & faster inflation are bigger factors.............
ReplyDeleteData may be good to bring minor move, but not a game changer.......
GOLD @ $ 1227.75 = Suggest closing Gold position as see risk for test of $ 1230-32 zones, since it failed to break $ 1225............
ReplyDeleteGBP may test 1.6480-00...zones
ReplyDeleteshould go long at 1.6450?
ReplyDeleteWell @ 1.6450 with Stops 1.6430, as BOE statement is due in 20 mins........
ReplyDeleteavoid buying Pound, a fall could extend up to 1.6530-35.......
ReplyDeletesorry 1.6430-35..........
ReplyDeletesir next in gold
ReplyDeleteGOLD @ $ 1230 = sell around $ 1230-32. Stops $ 1235...........
ReplyDeleteEURO @ 1.3599 = Do book your profit around 1.3550-60 levels.........
ReplyDeleteview about gbp same still wait for 1.6430 or should go short here ?
ReplyDeleteForget chasing GBP..........
ReplyDeleteCheers on Euro @ 1.3555..........
ReplyDeletePrefer going long around 1.3520. Stops 1.3470...............................
EURO ! 1.3560= It seems Euro could make another attempt towards 1.36 zones and may hold around 1.3550-60. If you wish buy Euro on dip with Stop Loss @ 1.3520...........
ReplyDeleteGOLD @ $ 1225 = Book your profit around $ 1223-25.......cheers
ReplyDeleteSplendid Sir,
ReplyDeleteIt was a wonderful session today.
Sir, do you think that Gold might dip further today and break 1218-15 zone ? Kindly advice
P.S.
ReplyDeleteI have already closed all my positions for today on Gold with 100% win ratio.
Faisal NYK is always bit tricky and rules the market.
ReplyDeleteGold trend is surely on the downside, but tomorrow's NFP is a big event that may hold gold for a moment testing $ 1215-18 zones is a possibility, if holds below $ 1228.......
Euro @ 1.3571 = looks set to rise...........
ReplyDeleteCheers on the GOLD short
ReplyDeleteImpeccable Timing Sir...
Thanks a ton
OK Sir, got it.
ReplyDeleteI have already closed my day of trading for today with a BIG smile :) on my face. Thank you so much Sir.
range about gbp today ?
ReplyDeletepd, GBP could correct against Euro and could roughly trade in 1.6410-90 range
ReplyDeleteCheers.................safil
ReplyDeleteA word about trading for new comers.
ReplyDeleteIt is important to understand that when I give you an entry level. I do it with lot of working/research and have to do with responsibility to make profit and at the same time protect you from big loss. This is why I insist on applying Stop Loss.
When you ask for my views, I have to leave my working, as I am monitoring positions taken by you on my recomendation.
So do not expect me to be on the dot. I am giving you comment because you asked for it and it is your position that you are willing to take risk. If I would have been sure about what you are asking or the trend then I would given signal before you putting me query.
This I have explained so that you have better understanding about my trading strategy. I do not believe in to much trading bottom line is that at the end of the day you close your books in plus instead of ending in bracket....Cheers