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Bad US data to put pressure for quick Fiscal Understanding

November 29, 2012

GMT 8:12 (Subscriber) – Hi Sirfew words please regarding, the fiscal cliff.As per my understanding the deal shall be close before Christmas, this case will boost the euro right? risk on envirement. So, I don’t follow why many anylists foresee the EURO at the end of the year below 1.26what’s your opinion regardin the EURO for the yearend?
GMT 8:49 –
Hi danidar, Well, I am note sure if the Fiscal understanding will be reached before Christmas or not as this will largely depend on policy shift/ understanding between Republicans & Democrats because, which is not dependant on two individuals but it involves Doves and Hawks of two parties. The sooner, better it is for US and the global economy.
But Euro has its own pros and cons. Europe is full of problems, all seventeen Euro-zone member out of 27 EU nations have their own issues and problems that has stretches to maximum. Now everything depends on how good they are to linger the problem.
The current strength of Euros is based on hopes that Draghi will come up with Short Terms bonds, but when ? Recent European data suggest Euro should have taken sever beating due to continued economic slowdown in the region. But it is caught in a fix between European problems and US fiscal cliff.
I have a different view, if US fiscal cliff issues is sorted out then then it should give boost to US Dollar because it will surly help in stimulating US economy. It will ease tightening factor in USA that should also help FED to reduce it QE operation. This support USD, which should gain strength.
On the other hand, I am expecting continuation of dealing tactics by the European financial managers, as buying of time suits them. But this again suggest that European problems is plenty and unending. Spain is in pipeline, do not judge by the European leaders statement, make a judgement yourself.
Therefore, it id difficult to give a number, but if you want to remain on the winning side, best strategy is that simply wait for Euro to rise, when it does sell, as I always say pick the top you will always get the opportunity to make money.
I will not be surprised to see a fall below 1.26 before Christmas because during this period Europe will have to face many challenges. Next is Germany’s nod on Greece bailout, yes could give 2-4 big figure jump before another thing happens.
GMT 8:59 (subscriber) – ok, good to know, thank u
gold view unchanged…?
GMT 9:01 – Gold = unchanged, pick the top to sell…..
GMT 9:44 (Subscriber) – sir shall sell eur at 1.2980!!
GMT 9:47 – pd, just keep in mind that Euro is likley to trade in 1.2965-05 band. I will not be surprised if it touches 1.3005 prior to US data……………
GMT 9:53 (Subscriber) – alrite sir..can u shed some light on eur/jpy pair!! i m stuck in that pair want ur opinion where its heading from here??
GMT 9:59 – Techiically Jpy has very little to gain at the momement and only respite it can get is from very strong US GDP data or Germany’s parliment making Greece deal difficult to execute that may put pressure on Euro or esle all odd as against JPY until Japan’s election………
GMT 10:29 – (Subscriber) ok sir thanks ..
GMT 12:26 (Subscriber) with a positive read on US GDP data, do you see a break of 1,3050 level?
GMT 12:28 – The devil will be in detail. Too eary to make a comment unless data is extremely poor…….. GDP 1.1-1.4 could give the shiver
GMT 13:36 – let market settle down. No new position is suggested at the moment. Gold could re-r-taet $ 1726-28
GMT 13:50 – EURO @ 1.2989 = I suspect we could see a test of 1.3020 if fails to dip below 1.2970
GBP @ 1.6033 = Cable could test 1.6055-60
GOLD @ $ 1721 = Watch $ 1717-18 may hold for upmove
GMT 13:51 – I am not recomending Selling US DOllar. Prefer to wait and pick the top to sell currencies & gold. Choice is yours……………
GMT 13:56 – AUD @ 1.0438 = If you went short AUD book your profit around 1.0432-38
GMT 14:29 – (Subscriber) sir shall sell gold at 1726 with 1730 stop!!
GMT 14:33 – not now, wait for possible test of $ 1728-30
GMT 15:12 (Subscriber) – Sir, where to close GBP and EURO short positions ?
GMT 15:15 – GBP around 1.608-13 & Euro around 1.2972-78. You sell again by picking the top if seen
GMT 15:18 – GOLD @ 1724 = book your profit around $ 1722
GMT 15:19 – JPY 81.98 = book your profit around 81.92-98
Cheers until tomorrow….


GMT 3:24 – EURO @ 1.2954 = After initially concentrating on developments in the Euro-zone region during the week, today market focus could shift towards release of barrage of US economic data’s. Jobless claim should dip by 5 to 8 pct after higher claims last week caused by Hurricane Sandy will be discounted, any deviation in number by larger percentage could have impact accordingly. This will be followed by annualized GDP data that could have larger impact on the market, as it will indicate the pace of economic growth and change in price of goods and services that helps ion determining the monetary value. Expectations are high as market is expecting improved data and hence, surprised bad number could thrash US Dollar
However, FED’s beige book is suggesting slowdown in the manufacturing sector that negates surge in Durable goods and industrial output. Out of 12-Fed region seven of there are reporting contracting of factory activity and 5 of them blaming fiscal cliff as one of the major cause.
Hence any delay in reaching an understanding on US fiscal matter support FEDs monthly purchase of USD 40 billion mortgage backed security QE plan and US Central Bank will become more determine and aggressive specially after Obama’s election win as huge liquidity injection will be required as FED is aware of the economic consequences and that it cannot afford further deterioration.
Market may opt for wait and see approach until the announcement of US economic data. Prior to that Euro-zones economic data will be released, but I m expecting thin activity until US market opens ranging between 1.2935-85. However, key levels to watch will be 1.3010,.Break will see a push towards 1.3070-80. On the downside fall below 1.2905 suggest test of 1.2850-60 zones.
GMT 3:33 – GOLD @ $ 1720.80 = Sell around $ 1723-25 levels, apply STOPS is $ 1728 breaks for $ 1715-16 or $ 1713
GMT 3:31 – AUD @ 1.0461 = Prior to US data 1.4075-85 should be good level to sell, as break adove 1.0505 looks difficult, but profit taking around 1.0430-35 is prefered
GMT 3:29 – JPY 82.06 = Do not see move beyond 82.25-30 level for 81.75-80, but needs to push below 81.65-70 for 81.50. Keep an eye on 82.60
GMT 13:26 – GBP @ 1.6015 = Sell around 1.6025-30 STOPS 1.6055 for 30-40 pip profit
GMT 13:50 – EURO @ 1.2989 = I suspect we could see a test of 1.3020 if fails to dip below 1.2970
GBP @ 1.6033 = Cable could test 1.6055-60
GOLD @ $ 1721 = Watch $ 1717-18 may hold for upmove

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