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Watch FED Language for Direction – Jan 30

January 30, 2013

GMT 4:01 – AUD @ 1.0469 = Support is at around 1.0440-50 leevls and a move towards 1.0485-95 is possibility, a push above 1.0510 is required for more gains. But fall below 1.0420 negates upmove.
GMT 3:52 JPY @ 90.86 =
Yen is a sell around 90.50 levels with STOPs if 90.20 breaks, as see risk for futher weakness of Japanese currency if 91.25 breaks for 91.60
GMT 3:48 – GBP @ 1.5751 =
See strong support around 1.5720-40 zones for test of 1.5790-95 or next level is 1.5820. fall below 1.5680 delays up-move
GMT 3:44 – GOLD @ $ 1665.30 = See strong support around $ 1658-60. Test and break of $ 1672-74could se a surge towards $ 1684 or test of $ 1698. However, fall below $ 1658 would confirm new lows

GMT 3:37 – EURO @ 1.3492 = As I have been pointing in my earlier posts that there are signs of  US economic recovery, as manufacturing sector is doing OK, service sector is satisfactory, retail sector is pushing ahead, but in recent months growth in the housing sector on an average have been pretty disappointing and this is why the pace of growth is not enough to counter unemployment rate. Recent numbers suggest that consumer confidence has also slow down that could be possibly due to measures taken to increase payroll tax.  
Overall, nothing exceptional has happened in the economic front to change FED’s policy stance, as it is aware they are still unable to create required number of jobs. On an average, US economy is required to create over 200.000 jobs per month to meet its target. What could of more interest to market players is the mood of FED’s voting members because out of 12-voting members, there are 4-new faces. Therefore, all eyes will be on the language of FOMC statement.
I believe that there is a high probability that FED could continue with its aggressive ongoing bond purchase program, which means US Dollar could remain soft and gold could benefit. However, any change in FED policy makers mood will see market moving in opposite direction.   

  WATCH for CURRENCY UPDATE…..Twitter @asadcmka

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