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DeLay iN FisCaL UnDerStaNDinG CouLD LeAD tO QE5 – dEc 14

December 14, 2012

LATE UPDATE…………..
GMT 6:38 – (Subscriber) sir plz shed some light on usd/chf??
GMT 6:47 -Nothing unusual, investors will tilt towards Swiss Franc, as AUD & JPY will have weak tone. In crosses I am axpecting market to challenge SNB and SFR tone to remain strong. Calculate versus Euro in croosses………
GMT 9:32 – we have witnessed some USD gains beacuse of weak European PMI numbers, buy I do not see much US Dollar gains and my morning view remains unchanged……Cheers
GMT 13:31 – View unchanged – USD to remain soft………….
GMT 14:37 (Subscriber) hi sir, usd/jpy long current level?
one more, stupid maybe, do you recomend a long position for this pair over the weekend, taking into consideration the elections?!!
GMT 14:42 – I would prefer to stay away and would not recomend to entering now….Too risky. Please enjoy your weekend rather than choosing for sleepless night……Cheers
GMT 14:57 – (Subscriber) what in gold stuck do u see a heavy jump in gold today
GMT 15:01 – Today, though gold does not have enough legs, market looks calm due to weekend and some of the events such Japan election & US fiscal cliff……
I am not sure about the mood od US traders.cheers
GMT 15:03 – OK pals, it seems that Europe is heading for close of dull day. We could see some excitement on Monday……..
Have a nice weekend….Cheers

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GMT 3:46 – Euro @ 1.3085 = As the deadlock between the two-leaders over US fiscal cliff continues the agreement on tax and spending will expire in next 17-days and if that happens are we heading for QE5 sooner than we thought ? I think this could could be a possibility if the date does not get extended because FED may not take risk as the US economy is showing signs of recovery.
As the day will pass without a positive word on fiscal cliff the pressure in market will increase. Announcement of QE4 did not help to improve market sentiment. Thursdays better US retail sales and jobless claim did not help the market to recover. Fall in Producer Price Index and ISM numbers indicates that today’s Consumer price and Industrial Production data could be soft, which may hurt market.
In Europe two other major developments have taken place as Greece will get the money and EU Finance Ministers agreed on common banking supervisor, which on paper seems to be a positive move. Under this agreement, EU banking supervisor will be allowed to monitor, audit and intervene if required that should improve the level of confidence in regions brittle banking system. The positive side of the banking union is that it will be in a position to rescue Euro-zone’s weaker banks when in trouble.
Meanwhile, as we approach weekend, elections will be held in Japan on Sunday. Reports are suggesting that LDP is on tack of easy victory and with the help of its ally party market is expecting that they could easily muster two-third majority that will help in breaking many policy deadlocks. The are pro-nuclear and vocal in the territorial row with China. Earlier they have already announced their plans to that to stimulate Japan’s economy they sharply increase fiscal spending through hyper-easy monetary policy that could further weaken Yen.
EURO @ 1.3085 = Euro has support around 1.3050-60 zones and unless break below 1.3020. I am expecting a move towards 1.3150-60 zones
GMT 4:05 – GOLD @ $ 1697 = See strong resistance around $ 1702-05 zones, as long as it stays below thuis level see risk for a drop towrads $ 1684-85 on break of $ 1689. But I suspect gold may take bigger dip.
GMT 3:59 – AUD 1.0533 = There is no change in my view, I do not see room for much gains. 1.0570-80 looks extremely difficult to break, with 1.0490 in sight as my next traget.
GMT 3:56 – JPY @ 83.90 = Unless Japanese currency falls below 82.50, see risk for more losses, as could bounve back from 83.40-50 zones. Break of 84.35 risk for 84.90. I will not be surprised to see break of 85.55 next week.
GMT 3:51 – GBP 1.6115 = Should find support around 1.6070-80 zones, but will be top heavy once above 1.6150-60 unless penetrates beyond 1.6220, which is unikley to happen. Fall below 1.6050 suggest sharp losses for GBP.

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