Tuesday, February 18

Asad Rizvi

Yesterday's US Dollar weakness in Asian market was as per expectation before correcting in Europe in thing trading session for the rest of the day. The foreign exchange market remains mildly bearish for USD due to bad economic number caused by poor weather in USA and hence, US economy is currently under performing. 

While, Europe   currently is  doing far better, Germany playing the role of locomotive, as it is pulling other economies of the region. Germany has already revised it growth forecast for 2014 upward to 1.8 pct from 1.7 pct, as  German government is confident of higher growth this year. Some of the economist are expecting even higher growth. 

In another move, Italian PM Letta's resignation did not impact European currency, as young Renzi is likely to become the Prime Minister of Italy. It is expected that he will inject more life, as he is a supporter of economic reforms and may not hesitate to take positive steps. 

Meanwhile, Pound Sterling continues to enjoy strength after receiving support from Mark Carney and his team members calling for strong growth, also hinting end of forward guidance that risk for for inflation to pick up. Hence, Pound remains a buy on dip. However, GBP  cannot afford economic weakness, as bad number will give reason to sell and profit taking could bash the currency.

GMT 3:10 - GOLD @ $ 1323 = Gold tested my weekly target $ 1333 and now will make another upside attempt, but  failure to move beyond $ 1328-30 risks for a drop to to test  1312-15 zones or else test of $ 1335-37 zones.

GMT 3:17 - EURO @ 1.3705 = Euro has support around 1.3670-80 that may hold for a test of 1.3735-40, but needs to break for a move towards 1.3770-75 zones or else break of support level risks for 1.3745.

GMT 3:22 - GBP @ 1.6728 = Ideally below or around 1.67 is the preferred area to enter, but should hold 1.6630-40 for another up move. Break of 1.6798 will encourage for new highs. 

GMT 3:26 - JPY @ 101.99 = JPY needs to move below 102.30-40 zones for more losses or else break of 101.30 will extend gains for the Japanese currency.

GMT 3:30 - AUD @ 0.9070 = Unless AUD penetrates beyond 0.9120-40 zones, risk is for a fall towards 0.9035-40 zones. Break is required for further losses or will bounce back to re-test highs.

    

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.