Wednesday, February 12

Asad Rizvi

I think so far, FED strategy is very clear that they will not deviate from its alteration plan and would continue to reduce its bond buying amount unless crack appears in US economy. There is nothing unusual about such approach, it is rather a sensible view. It also confirms that Yellen knows her responsibility due to her neutral stance. Now it is for the market to her lips and get the message.

Focus and emphasis should be performance based and current economic environment due to bad weather condition may extend for another month or so, which does not mean FED will deviate from its original plan. She spoke about the unrest in emerging market and the message is clear it would only bother them if it disturbs US market. FED seems comfortable with its ongoing policy stance and by the time it meet to discuss their next monetary policy in March, by then US economy is expected to take a turn on the upside.      

Meanwhile, focus today could shift towards UK, as BOE will be releasing its quarterly inflation report that will project inflation and growth prospects. The challenge will be 7 pct unemployment threshold, which is away by a whisker 0.1 pct, so the key will be adjustments that it will make to its forward guidance.

GMT 3:32 - GOLD @ $ 1286 = The risk of major up move has reduced. Any up move towards $ 1291-94 zones would be good opportunity to sell, as break of $ 1277-79 is required for gold to test $ 1270 levels or else $ 1297. 
GMT 3:43 - EURO @ 1.3633 = Euro may struggle to move beyond 1.3655-70 zones and may gradually dip towards 1.36, break should encourage for a test of 1.3570-80 zones or else 1.3695 before down again.

GMT 3:54 - GBP @ 1.6448 = Wild swings can be seen. Prior to release of quarterly report, 1.6410-20 should hold for test of 1.6480-90 zones, later break of 1.6530 is required for more gains or else if protection 1.6370-80 surrenders, GBP could test 1.6250-80 zones. Today risk is for both way moves.

GMT 3:59 - AUD @ 0.9060 = Aussie should hold 0.9015-20 levels for a test of 0.9090-00 levels, needs to push beyond for 0.9120 or else.0.8990. 

GMT 4:04 JPY @ 102.51 = likely to hold around 102.10-30 for 102.90-00.

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.