Currencies & Gold

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@asadcmka

FX & GOLD - Daily Outlook - Feb 4

EURO @ 1.1470 = The up move should exhaust around or below 1.1490-00 or else breach of levels could witness a final surge towards 1.1560 before down again. Needs to clear 1.1420-40 support level for 1.1375 

GOLD @ $ 1265 = Gold is likley to hold $ 1260-62 for a move and break of $ 1270, break will encourage for a test of $ 1275-78 zones. Or else fall below $ 1257 risks for $ 1252.
GBP @ 1.5165 = Support 1.5130-40 should hold for test and break of 1.5198 for 1.5220. Or else 1.5190 

Europe Clueless after Greece Elections !

Market is stuck is a range trading and trying to determine next direction, as it are still clueless about the outcome of Greece elections. I suspect that neither Greece's newly elected government nor European policymakers are willing to confront on pending or coming issues unless it is necessary to intervene. 

Both are well aware of the consequences and the high price Europe may have to pay if separation or divorce takes place. 

Hence, both for the moment have adopt compromising attitude and wants to linger on for the time being. This is why minus Greece, which is faced with the crux of the problem, other European markets are behaving in an orderly manner. European bond and equity market is a good example. 

The bigger challenge is threat to EURO and Monetary Union, which could face big risk if at any point in time it is decided to part away with Greece.

The problem is that Greece has a massive debt, which cannot be corrected or checked at the current pace of growth and Syriza too has a valid argument that his country needs to do away with all the promise his predecessor made, as the conditions set by the Torika is too harsh for economic recovery that needs structural and economic changes of Greece's own liking.  

Therefore, I see every possibility of delay and time buying strategy from both the side until next maturity arrives. The demand from Torika would be for Greece to act, but European policy makers may adopt softer approach for some more time and the new Greece government will be looking for reason to escape. Just like French President Hollande refused to be dictated on issuess. France echoed for economic governance but was critical of commission. France was blessed for 2-extra years to bring down the deficit to EU limits. 

Though Greece is not France, but this is what politics is all about "Odds do have to Compromise". Greece is here to stay in monetary union as Europe cannot afford adventurism because of overall poor economic condition. Parting will surely lead to crack.

EURO @ 1.1330 = Hence, until there is some excitement in the economic front. Euro may hold around 1.1220-50 levels and needs to surpass 1.1390 for possible test of 1.1450 before down again. 

GOLD @ $ 1279 =  If gold holds around $ 1274-76, there is minor risk for test of $ 1285-90 zones before down again or else re-visit $ 1266 in unavoidable.      

Prospects for GOLD & CURRENCIES (Feb 2-6)

@asadcmka

Last week FED's stance on economy remain unchanged with some hint of earlier rate cut. Though in my view this may not happen too soon, but growth prospect for the time being is expected to be encouraging that should provide momentum to the US currency.

This week, market will obviously focus on US inflation data for future interest rate guidance, but major concentration by the weekend will shift towards Non-Farm Payroll data, which could be the main driver of foreign exchange market.  

EURO @ 1.1285 = On the European front, Greece uncertainty would continue to haunt the market. Any bad news from Europe would add pressure on the European currency. 

Meanwhile, last week we saw occurrence of some corrective moves in Euro. Further quietness in Euro-zone region will see some more consolidation and stable Euro. After the recent release of batch of neutral to positive Euro-zone data, market may not show aggression unless Greece's newly elected government shows hostility towards European policy makers. 

However, any EURO strength/gains should be short lived, as currency will find more sellers than buyers due shift in European asset portfolio.

EURO needs to fall below 1.1120-40 zones for a move towards 1.0920-50 zones. However, failure to move below support levels risks for another upside test. 1st Barrier is @ 1.1350-80, with Major Protection @ 1.1480, if surrenders 1.1620 will be the next level to watch.

GBP @ 1.5069 = Meanwhile, Pound Sterling is another currency that could struggle on back of weak economic condition at home due to deflationary pressure. The change in stance of 2-BoE voting members that were earlier demanding rate hike, now prefers to stay on hold and watch pace of economic move should add pressure on GBP. 

Further, growing political uneasiness due to coming May-2015 elections and BoE's somewhat Dovish approach should hinder foreign investors, which is again bad for Pound.

As long as 1.5280-00 holds Pound Sterling is likely to remain under selling pressure. Needs to push below 1.4940 for deeper fall to test 1.4820. Break here is requited for 1.4650

JPY @ 117.47 = JPY needs to penetrate 116.80-00 levels for possible test of 115-80-00 zones. However, see risk for a move towards 118.40-60 for 119.20  

Gold @ 1283.50 = Lost its luster, as it no more enjoys a safe haven status. We may have seen end of aggressive purchase of gold in India, as the gap seems to have filled. For last couple of years, physical gold buying in India thinned down after the introduction of duty and rebate by the previous regime. Good demand for gold was witnessed after the newly elected government lifted taxes.    

Presently, there is no major Geo political tension. US is done with its ultra loose monetary policy and quantitative easing (QE) strategy that saw good part of money flowing towards gold portfolio. This may not be the case with European QE money, as ECB strategy will surely differ. 

Slowdown in China is also not supportive for gold, as evidence clearly suggest reduction in physical demand. Institutional demand for gold will also remain soft. Overall, desire for gold buying has significantly reduced, as equity and other asset class are surly on top of investors list.  

Strong US Dollar and liquidity squeeze caused by falling global oil prices is another reality that does not bode well for the Yellow metal.

Therefore, in present times Greece worry could only be the supportive factor that may give some life to gold, but its an opportunity for investors and speculators holding gold to take price advantage and reduce holding, as gold Bears have very few reason to celebrate.

WEEKLY VIEW  = Initially gold will rise in early trading, but during the week gold still needs to clear $ 1305-10 levels, which looks tough to enter new territory of $ 1325-40 zones. Therefore, preferred strategy would be to pick upside to sell, as break of $ 1265-70 is required for a fall towards $ 1250-55 zones.

MEDIUM TERM VIEW = Gold is still is a Bearish mode and should find sellers on the rise. For bigger gains gold needs to penetrate beyond $ 1340 to teat $ 1380-00 zones. However, once $ 1240 surrenders attaining $ 1170-75 levels would be easier for $ 1120.         

Weekly Outlook Nov 24-28

Asad Rizvi

Nov 25 - Daily Updates on @asadcmka 

USD = As we are approaching year end market should be cautious with long US Dollar position. Though nothing has changed, but year end book squaring could see some volatile moves in coming days and minor set-back in US Economic data would give reason for sharp moves. Preferable strategy would be entering at appropriate top and bottom levels to avoid risk of getting wrong footed,which could be painful due to choppy moves.

OIL = Some off the major event is OPEC meeting on Nov 27 and I see Oil Glut, which may be unavoidable in Near Term to Medium Term, as I see price war due to oversupply (stay tuned for detailed analysis)

GOLD = There was two positives for gold, Chinese rate cut, Draghi's pledge for quick stimulus package, which means QE soon. But they were not enough to give big boost to gold. This week as are approaching Swiss vote for 20 gold reserves, which is due on Nov 30, reports from Switzerland is not very encouraging for the gold bulls, as the tilt is towards nay. 

Gold, which is currently trading near December 31, 2013 low, should close below this level, because in 2014 has been bad year for gold, as there was no major supportive factor. Instead unwinding of QE by FED is big blow and I will not be surprised to see sharp fall after Nov 30 Swiss vote, if it fails to get nod from Swiss voters and yes vote will only provide opportunity to the Bears for another kill before year end.  

GOLD @ $ 1202 =  On the up challenge is to break $ 1218 for $ 1235, which looks less likely to happen. However, break of support $ 1190 is required for $ 1178 that could be delayed.    

EURO = @ 1.2391 = Pressure on Euro likely to stay this week, but support is around 1.2250-70. On the up, break of 1.2450 is required for 1.2530. Prefer to top to sell.

GBP 1.5651 = This week, Cable needs to break 1.5520-40 levels for deeper fall. However, sellers will remain active, as long as 1.5750-80 is held.

JPY @ 117.75 = Suspect that JPY could make strong comeback, if support levels 118.50-80 holds. However, break of 116.50-70 is required for 115.70  

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@asadcmka or check  https://asadcmka.wordpress.com/

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@asadcmka

Monday November 03 - 07

Asad Rizvi

Catch me on @asadcmka for frequent updates

GOLD @ $1173 = Key resistance is at $ 1195 & $ 1215, as risk for new lows will increase if $ 1140-45 fails to hold for $ 1122.

EURO @ 1.2517 = Needs to clear 1.2598 for 1.2650. Initially pressure is on downside. Protection is at 1.2380-90. Choppy trade ahead.

GBP @ 1.5984 = Strong support around `1.5890. Sharp reversal is possible and break of 1.5995 will encourage for 1.6050, else 1.5830

JPY @ 112.27 = Surprise BOJ move seen. JPY will be under pressure. Small correction is possible, as 105.80 is key for 116.50

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.

Monday, October 20

Asad Rizvi

Catch me on Twitter @asadcmka

GOLD @ $ 1242 = Likely to exhaust around $ 1245-50 zones for another dip to test $ 1230-35 or else $ 1254....

Friday, February 21

Asad Rizvi

Market seems stuck up with quite a few things that includes political and financial matters. Discussion about FED tapering and its impact on US and spillover effect on global economies have been going on since months that gave shiver to emerging markets couple of months ago, which is still brittle. Economic conditions in China is not very supportive to good growth,  which is not good news for its active trading partners. Ukraine poses risk for European and neighboring markets. Therefore, market is unsure about the end result, which means lingering of problems surely posses threat to growth and stability.

It seems that financial market is not happy with current ongoing global developments and the sentiments are mixed, as weak US data is not having greater impact on US Dollar and there is a slight shift to wards safe heaven assets.

US economic data released last night was mixed that did not have much impact on the market, as it has started to realize that poor performance is due to bad weather condition that should be short lived. Today's existing US Homes Sales may not have larger impact on the market. Hence, it is expected US economic recovery will take few more weeks before turnaround occurs.

GMT 3:17 - GOLD @ $ 1319 = Gold needs to hold below $ 1325 resistance levels for a move towards $ 1310-12. Break will encourage for further losses. However, if gold close above the resistance level, it could be heading for $ 1355 next week.

GMT 3: 24 - EURO @ 1.3719 = We could see a feeble upside attempt towards 1.3755-60 only on break of 1.3725-30 zones. On the downside break of 1.3690 will encourage for a test of 1.3670. 

GMT 3:29 - GBP @ 1.6654 = If Cable is unable to break above 1.6680-90 zones, there is a risk for a move towards 1.6610-20. But buyers could emerge on dip, as strong support at 1.6550 should not surrender. 

GMT 3:32 - JPY @ 102.46 = JPY needs to hold support 102.10 for a move towards 102.60-70 zones and is required to penetrate beyond 102.98 for 103.20 or else 101.90.

GMT 3:36 - AUD @ 0.8987 = Today's trading range is between 0.8930 - 0.9020. Unless break out occurs, it is likely to find buyers on dip.

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.

Thursday, February 20

Asad Rizvi

Weak US data now looks acceptable, as market did not react sharply to poor housing data, probably realizing that bad weather is a temporary blow. US economy is still on the up move and unless there are signs of imminent slowdown there is less to worry about.

Furthermore, release of FED minutes clearly hints that majority of its members are comfortable with the pace of growth and does want to go on back foot by reversing its tapering plan and may even consider to amend its forward guidance strategy. I think if FED does not alter its plan to slash USD 10 billion after its March gathering, it will provide better direction and clear intention about FED strategy that taper will continue that should end by the year ending 2014.

Meanwhile, today's German data PMI is an important indicator due to the released that will give some direction about Euro's next move, which could be disappointing due recent release of weak German data. Market will also be watching release of batch of US economic data, as jobless claims will be key indicator of the day.

GMT 3:21 - GOLD @ $ 1311 = Gold needs to push beyond $ 1315 for $ 1318, which looks tough in Asia as it could move down to $ 1307 or $ 1304. Failure to break $ 1297-00 on the downside would gain risk for another up move. 
GMT 3:27 - EURO @ 1.3755 = There is a minor risk that as long as 1.3710-20 levels hold we could a a push above 1.3765-70 for possible test of 1.3780-90 zones before exhausting for down move. Break of support levels will encourage for test of 1.3680-90 levels.

GMT 3:31 -GBP @ 1.6674 = As long as 1.6610-20 holds buyer will hop in to pick the lows, but may find resistance around 1.6725-35 area that needs to clear for more gains or else another fall will be seen.

GMT 3:36 - JPY @ 102.04 = JPY will make further gains, as it is likely to hold around 102.30 levels. Break of 101.75 risks for 101.50 or else 102.50. 

GMT 3:39 - AUD @ 0.8946 = The expected fall has occurred that may extend, but caution is required, as Aussie may find support around 0.8910 where buying is preferred with Stop loss 0.8870 for a move towards 0.8970-80 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.

Wednesday, February 19, 2014

Asad Rizvi

US economic data continues to show weaker growth in recent times and the trend is likely to continue for few more weeks as bad weather has hampered economic recovery that may be seen for few more weeks. 

However, though Yellen in her testimony spoke about US economic prospects at length, but today market will be watching FED's meeting minutes for more clues, as market will also be focusing on the release of US economic data's  for guidance that may not be too supportive for US Dollar for sometime.    

GMT 3:03 - GOLD @ $ 1318 = prior of release of FED Minutes, gold could trade in a wide range between $ 1312 - $ 1332, but on a broader picture it is required to break $ 1305 on the downside and $ 1338 on the upside to provide next direction. '

GMT 3:09 - EURO @ 1.3761 = A push beyond 1.3775-80 is required to stretch up to 1.3795-00 zones or else failure would risk for a drop towards 1.3735 or 1.3710.

GMT 3:14 - GBP @ 1.6682 = Looks less impressive and may struggle to move above 1.6710-20 levels for another test of 1.6650, break would risk for a test of 1.6510-20 zones. Or else 1.6750.

GMT 3:17 - JPY @ 102.24 = JPY is still locked in a range and needs to break

101.80-90 zones for 101,60 or else would find support around 102.50-60.

GMT 3:20 - AUD @ 0.9006 = Aussie has stiff resistance around 0.9030-50 zones and may slip towards 0.8970-75 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.

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.