Tuesday, February 11 2014

Asad Rizvi

In my yesterday's closing note  have pointed out that today US Dollar will have  a weaker tone, as market will turn towards Yellen who is considered a Dove and similarly in my weekly out look I said that gold will initially  make gains and break of $ 1275-80 will risk for a move towards $ 1295-98. My view was based on one major factor that majority of the large investors, hedge funds, traders, corporations and big business houses having access to cheap funds are now too dependent on free money. They often look for bearish excuse and this is good time for them to be on the streets taking advantage of weak payroll data. Interestingly its the unemployment number threshold of 6.5 pct that FED has being targeting and they have almost attained by reaching 6.6 pct. I think if the targeted unemployment rate is lowered with combination of forward guidance then the ongoing party may continue for some time or else this rally could fizzle out. 

However, with FED balance sheet expanding despite reduction in its bond purchase amount, it may not be too easy for FED Chairwoman to defend its QE program and hence, she may have to support FED extremely friendly monetary policy. But since FED has taken a step forward, I do not see any change in its tapering strategy.

GMT 3: 29 - GOLD @ $ 1284 = We could be heading for a choppy day, as gold could make another upside move around $ 1287-90 zones before exhausting, but needs to push below $ 1275 for deeper fall towards $ 1266 or esle may see a move to test $ 1297 zones.
GMT 3:36 - EURO @ 1.3667 = Euro should hold around 1.3635 levels for a move towards 1.3680, break would enc ourage to test 1.3705-10 zones. Fall below support level will see a move towards 1.3610-15.

GMT 3:50 - GBP @ 1.6419 = CabEURO @ 1.3667 = Euro should hold around 1.3635 levels for a move towards 1.3680, break would encourage to test 1.3705-10 zones. Fall below support level will see a move towards 1.3610-15.

le may hold around 1.6375-85 levels and unless 1.6340 surrenders, it has potential to surge towards 1.6475-80 zones. A clear break could extend gains to test 1.6510-20 levels.

GMT 3:53 - JPY @ 102.17 = JPY may find support around 102.50-60 levels, as gains for JPY could extend to hit 101.50 or else 102.90. 

GMT 4:00 AUD @ 0.9007 = The expected move has occurred, now caution is required as we could see Aussie stretching towards 0.9040-45 zones before easing for 0.8950-60 or else may possibly test 0.9070-80.

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.