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.

Monday February, 17-21

Asad Rizvi

It was not a very unusual week, as effect of cold weather in USA is having sever impact on its economy. Signs are obvious that the weather condition will remain abnormal for sometime that will bother US economic growth. The big question is that if this prolonged period of poor weather condition hitting US economy will be tolerated by FED or not.

FED has taken a huge decision to halt sharp growth of its balance sheet size and may not want to reverse its decision, instead it may look for an opportunity to halt liquidity injection as early as possible that will depend on future economic performance. 

In her last week's testimony, Fed Chairwoman Janet Yellen has already shown her confidence in economy, as she knows that weather related economic hurdle is temporary. She had already hinted that  FED has no intention deviate from its current tapering plan. 

This week market will once again focus on economic report, though there is no major US data due to be released that could move the market either way, but poor release of economic data could snub the market and further weaken the sentiment. FED minutes due to be released on Wednesday may not have big impact in the market after Janet Yellen's testimony.  

In Europe, German growth is the dominating factor. There are signs of mixed economic activity in other European region that still needs to perform. Recent gains in European GDP number is based on strong German growth that was helped by surprise rise in French growth, as the two-economies are considered backbone of Euro-zone economy. But low inflation still remains a matter of grave concern that will bother ECB policy makers, which does not combine well with strong Euro. Therefore, it is still too early to think that ECB gets ample of time to breath that still faces many challenges.

GOLD @ $ 1318 = The current rally in gold is a perfect call in line of my last week's forecast. The trend may continue before exhausting due to lack of US economic gains because of bad weather condition. However, this move will be short lived, as FED is unlikely to deviate from its tapering plan. With gold surging sharply, the risk has increased that profit taking will see sharp fall of gold in coming days/weeks. 

Gold could gradually inch up towards $ 1230-35 zones, but should become vulnerable beyond $ 1340-45. On the downside, break below $ 1305-10 will encourage for a test of $ 1290-95 zones.

EUR @ 1,3690 = Euro is required to pierce through 1.3725-30 zones to attack 1.3790-95 and only break of this levels would encourage for 1.3865, but failure to test the top would encourage for a dip to  test 1.3610, as 1.3550 is the key support level for Euro.

GBP  @ 1.6644 = Pound continues to enjoy its strength of expectation of better future growth prospects that should encourage buying on dips, As long as support levels 1.6520-50 holds, upside test and break of 1.6790 risks for a test of 1.6850-80 zones.

JPY @ 101.79 = JPY is trading in a tight range looking for clearer direction. Only break of 101.20-40 resistance will encourage for 100.40. But JPY is required to penetrate 102.90-95 for 103.50.

AUD @ 0.9027 = Aussie is enjoying strength, which could be short lived, as this upside rally may exhaust if fails to move beyond 0.9090-00 and only break will encourage for 0.9140. Risk for fall will increase if 0.8930-40 levels surrender for 0.8880. 

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.

Friday, February 14

Asad Rizvi

Once gain we have witnessed disappointing US data, bad weather is mainly responsible for such a poor showing that may drag on for sometime, as weather conditions in USA continues to be very depressing that will have lag effect on the economy, which may prolong. However, this will not change FED stance as the current release if data is not very alarming and unless economy takes real  bad shape FED has nothing to worry about.

Meanwhile, Europe too had started to slowdown and today's release of German and European GDP will provide more clue about the Euro-zone economic performance. Poor data release should once again ring the alarm bells and market will start talking of rate cut and liquidity injection, similarly evidence of better growth in the Euro region will give European currency boost that could see new highs.       

GMT 3:22 - GOLD @ $ 1304  = Gold is moving in line of my weekly forecast, as I have warned earlier that break of $ 1295-98 zones would risk for a test of $ 1325-30 zones. now needs to make a clean break of $ 1315 and should hold $ 1295-97 zones or else $ 1285.

GMT 3:29 - EURO @ 1.3680 = Euro needs to push beyond 1.3710 for test of 1.3745-50 or risk is for a fall but needs to break 1.3648 for 1.3610.

GMT 3:33 - GBP @ 1.6654 = There is strong uptrend, but needs to surpass 1.6685=95 levels for 1.6725 or else could dip to test 1.6605-15 zones. However buy will remain active as long as 1.6540-50 levels is protected.

GMT 3:36 - JPY @ 101.82 = JPY has strong resistance around 101.40-50 should hold for 102.25 break would encourage for 102.60 or else 101.10-20.

GMT 3:39 - AUD @ 0.8992 = Aussie will find resistance around 0.9020-40 zones and should not surpass for 0.8950 or else 0.9070.

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 13

Asad Rizvi

Yesterday market focus shifted towards UK inflation report, as Mark Carney showed optimism about future growth prospect with unemployment getting smaller space in his discussion that fell at a much faster pace than expectation. The message is clear that if growth picks up earlier than anticipated and with declining unemployment trend, it will inflate UK economy, which means interest rate adjustment will required at same pace or in other words the early rate hike is possible.

Meanwhile, it was quite day with no major data in USA. But today it is going to be a busy day, as we have already see Australian Dollar bashing after poor jobs data. German Harmonized CPI, ECB Monthly Report and specially batch of data due to be released from USA will give more direction. However, Yellen's speech in Senate today will be watched with keen interest  for more clues on FED's future stance.

GMT 3:09 - GOLD @ $ 1291 = As the down move did not occur gold may hold $ 1285-87 levels in Asia and break $1295 to test $ 1298-00 zones. Break would risk to challenge $ 1305, probably not is Asia and may correct. Market will remains an choppy and needs to fall below $ 1280-82 for more losses.
GMT 3:14 - EURO @ 1.3614 = Euro needs to push beyond 1.3625-30 for a test of 1.3655-65 zones. However unless breaks 1.3698, risk is on the downside. A move below 1.3580-85 will encourage for 1.3565. 

GMT 3:20 - GBP @ 1.6618 = Mood has certainly turned Bullish and buyers are expected to pick on dip as long as 1.6520-30 holds. GBP has support around 1.6580 and should hold for a test of 1.6665-75 zones.

GMT 3:22 - JPY @ 102.28 = JPY is likely to hang around 101.80 - 102.60.

GMT 3: 27 - AUD @ 0.8943 = Aussie plunged and may struggle to move move beyond 0.8980-90 and could dip to test 0.8905 zones. Failing to hold support levels risks for test of  0.8870-80 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 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.

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.

Monday Feb 10-14

Asad Rizvi

Cold weather is surely responsible for recent economic slowdown in USA that has halted the surge that we saw in previous quarter adding fewer jobs in last 2-months. This is not an unusual economic condition that will stop FED from reducing its stimulus plan, as on the positive side average hourly earnings have increased and labor participation has increased. 

Market will now focus on Janet Yellen's next week testimony on economy and FED's monetary policy stance. She is due to appear before House on Tuesday and Senate on Thursday in her 1st semi-annual monetary policy report to Congress and as the unemployment rate approaches 6.5 pct threshold, with unemployment reaching 6.6 pct, she may have to disclose or talk about FED's next plan/intention, which should be key point to note. She will emphasis on her successful accommodation policy stance and talk a bit on forward guidance. 

Considering her past behavior as a strong Dove her Dovish sentences could push US Dollar down and gold up, but after becoming the FED Chairwoman there is surely change in her stance and therefore, I will not surprised if she maintains a balance approach. 

Meanwhile, pipe piper Mario Draghi has done it once again by taking a u-turn with his less Dovish comments that helped in shifting market sentiment. Only recently he was showing his concern about weak economic condition in Europe and now he thinks that there is no threat of deflation. He has to be cautious, as such policy statement does not work every time and if he continues with same the approach every time his credibility will be questioned if European economy is unable to pick up. 

Europe has along way to go, minor improvement in manufacturing and service sector does not mean European economy will enjoy same trend, which is on the border line. Europe is still suffering with 12 pct unemployment rate, it has higher youth unemployment rate. European economy is still dependent on Central Bank liquidity injection, spending and deficit still needs to be controlled. Whereas, Germany has shown good growth trend due to strong domestic demand, but export needs to pick up further and lot will depend on global growth that still faces huge risk of slowdown.          

GOLD @ $ 1266 = Non-farm Payroll has become less effective data for gold after FED deciding to continue with its stimulus reduction plan, fall in unemployment was another factor that hindered gold to make big gains. However, tone of FED Chairwoman on Tuesday during her testimony could be key to golds next move. 

Gold may initially hold around $ 1248-55 levels for a test of of $ 1275-80 zones, break risk for a move towards $ 1295-98, but should exhaust or else if surrenders, gold could test $ 1325-30 zones. However, on the downside break $ 245 will encourage for a test $ 1225-30 zones. 

EURO @ 1.3633 = Question raised by the German court's constitutional ruling about the legality of OMT program basically should help Euro, which does not favor QE or in other words makes liquidity injection difficult that would lead to more demand for European currency. Euro move will also depend on Yellen's statement. 

Euro's up move will depend on break of 1.3720-50 zones, a push above could see push extending towards 1.3850, but fall below 1.3550 will encourage for a move towards 1.3470-80 zones.

GBP @ 1.6408 = Though Pound Sterling lost its upside momentum recently, but BOE's inflation this week would give more clarity. Any move beyond 1.6490-95 would give lift to Pound Sterling that should help Pound to move towards 1.6590. However, downside break of 1.6310 will challenge test of 1.6220-50 zones.  

JPY @ 102.30 = JPY needs to break 102.90 for 103.50, but failure to move beyond 103.50-80 zones risks for 101.40, break would see further gains for Japanese Yen for test of 100.50-80.

AUD @ 0.8957 = Aussie needs to push beyond 0.9025 zones for a test of 0.9080-90 levels. Drop below 0.8870 would see a move towards 0.8750.  

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.

Friday, Feb 7

Asad Rizvi

Draghi has a habit of making 360 degree policy shift at a very fast pace and once again he opted for same strategy sensing that market is buffoon, which again proved to be correct . He took the lead by comforting the market at his press conference that there is no threat of deflation in Europe that helped Euro to surge sharply. 

This is certainly a very strange statement, as European unemployment rate is hovering around 12 pct, as Euro region is struggling for growth and cannot survive without injection on cheap money. Though economic slide may have halted, but it is still faced with numerous problems. Current stability is at a very heavy cost and poses huge risk if artificially injected liquidity is drained out of the system. Anyhow, this is how market behaves when it wants to ignore the reality. 

Meanwhile, market is waiting for today's jobs data, which could again be dicey due to sever cold condition in USA. In my view, if Non-Payroll drop to 150.000-160.000, it may initially give shiver to the market, but Unemployment Rate anything better than 6.7 pct should balance it out next week. Similarly, better jobs  data could give a jolt to the Doves, which I am not ruling out, as jobless claims fell by 20.000 and growth in private sector was clearly on the up. Do keep a close watch on the release of data, as I am expecting significant upward revision of December numbers. 

Therefore, the conclusion is that mixed data could see choppy and volatile trading conditions and market may take time to settle. However, possibly strong number will lead to discussion of FED winding of its asset purchases at a faster pace and more misery for emerging markets.  

GMT 3:29 - GOLD @ $ 1260 = Expecting gold to hold around $ 1254 and $ 1268 band prior to data and should be picked up on dip. However, on broader note on the downside a fall below $ 1235 will open gates for more losses. While on the up, break of $ 1275-80 zones is required for move to extend towards $ 1288-90 levels before exhausting.

GMT 3:36 - EURO @ 1.3591 = Prior Euro may hold around 1.3560-70 zones for a test of 1.3620-30 levels. Break of support levels is required for a test of 1.3520, but may find buyers on the up move above 1.3650 encourage for a test of 1.3690-00 zones.

GMT 3:39 - GBP @ 1.6323 = Cable is locked in range an may hold until it get a clear direction. break of 1.6260-70 support level is required for a test o 1.6205 levels and in the up move beyond 1.6350 will open doors for a test of 1.6375-90 zones.

GMT 3:43 - JPY @ 101.96 = Breakout of 101.50 and 102.50 is required for next direction.

GMT 3:46 - AUD @ 08942 = We have seen the top, as Aussie has almost hit the target 0.8990 and now looking good for a drop towards 0.8860-70 zones. should stay below 0.8998 or else test of 0.9020-40 cannot be ruled out. 

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, Feb 6

Asad Rizvi

As market awaits tomorrow's jobs data, the ADP figure hinted that private sector created fewer jobs than market expectation, but overall it was not a bad number. Later release of ISM non-manufacturing data suggesting better picture of the economy. Its is still quite a mixed bag of numbers that we are getting from USA, but it should not be matter of concern, as poor weather has distorted the recent release of economic data from USA. Today's release of US Trade Balance and Initial Jobless Claims will provide more clue.

Today's monetary policy announcement from Europe and UK is the biggest event of the day, as fear of Europe sinking into deflation is getting all the attention that threatens for more rate cut and or liquidity injection or if ECB may consider applying any other easing monetary tool. Following interest rate announcement Mario Draghi will catch attention.

BOE's decision of interest rate is another important event of the day, but nothing is expected to change. Recently we have seen sharp reduction in UK unemployment rate, which is now close to target, but BOE may not take decision in haste to jack up rates too early that may spoil economic recovery, as there are signs of UK economy getting exhausted. However, the key to first change would be withdraw of its Pound 375 billion asset purchase program. 

I think the overall focus for future guidance to all the monetary policy announcement will be towards the language. So watch out for any Central Bank's talk on forward guidance that may provide some clue about their future plans.

GMT 8:20 - GOLD @ $ 1256 = We may have seen the top of the week and now gold should hold around $ 1258-62 levels or could maximum stretch up to $ 1265, which looks tough. Break of $ 1248 will help to push gold towards $ 1242-45 zones.

GMT 3:31 - EURO @ 1.3527 = Today the challenge for Euro would be to move beyond 1.3540-50 zones for 1.3575-85, which looks tough and failure would risk for a drop. But needs to break 1.3460-70 support level for 1.3420.

GMT 3:40 - GBP @ 1.6310 = Pound still needs to move beyond 1.6340-50 zones for more gains, but suspect that it has lost its upside momentum and may re-test 1.6240-50 zones. But Pound needs to break 1.6205 for more losses. 

GMT 3:45 - JPY @ 101.54 = We could a see a move towards 101.80-90 and need to break of 102.20 or else another test of 101.10-20 zones will be seen. 

GMT 3:48 - AUD @ 0.8963 = Aussie is likely to trade in a 0.8910-0.8990 band.

           

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.