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Watch Out ! Bond Yield Helping EURO, not the Economy – April 25

April 25, 2013

Interaction with my Subscribers during the day……………

6:19 AM – should go for short at 1446 or 1450?

7:03 AM – GOLD @ $ 1444 = Suggest taking profit around $ 1442-44, as risk is that if holds $ 1440-42, we could still see another upside test of $ 1450-52 zones.
7:14 AM – Sir shall go long gold at 1443 wid stops 1439

7:17 AM – GOLD @$ 1443 = I have already indicated for small up move from $ 1442, which is intact. If went long……….Stops $ 1438………

7:37 AM – EURO @ 1.3038 =Looking for 30-35 pip drop

7:38 AM – GBP @ 1.5290 = Target met. Book your profit around 1.5285-90………Cheers

8:33 AM – GBP To test 1.5470-90 zones.Should hold above 1.5350…………………..

8:34 AM – Buying area 1.5375-90………

 8:54 AM – Hi Sir,  And if want to short GBP then where to Enter ? Thanks

8:57 AM –  not now let market test the upside. Then will pick the top. Right now if you ask me, I will wait for 1.5525 zones……..

 9:13 AM – Gold @ $ 1448 = book your profit around $ 1448-50…….cheers

9:18 AM – sir euro at 1.3070 should go short here ?

9:20 AM – EURO @ 1.3067 = Could see some more gains as two major developments. Italy agreeing to a new PM and Merkel’s latest statement that she has liking for Higher Interest Rate may support Euro. So not short Euro for the moment………..

10:00 AM – sir shall go short gold at 1447 or wait for more upside??

10:16 AM – I will not encourage and would wait for NYK. If you wish try Short with Stops $ 1452………..

10:42 AM – sir gbp target intact 1.5470?? i m long form 1.54??

10:53 AM -Yes, waiting to book profit around 1.5460-80………..

2:19 PM -GBP @ 1.5476 = Book your profit around 1.5476-82……….Cheers

 12:20 PM – Selling of gold is not recomended as there is risk that break if $ 1452-54 could see a surge towards $ 1458-62 zones………..

12:30 PM -Sell gold Target $ 1440-42 Stops $ 1458………
SELL Euro Target 1.3030-40………………..

12:31 PM – Sell gold around $ 1453-55 For 8-10 Dollars

12:45 PM – sir shall go short gbp ??

12:48 PM– If support 1.5330-40 holds could re-rest 1.5380-90

12:49 PM -Big figure is 54, 1.5430-40 for 1.5480-90

1:11 PM – GOLD @ $ `1448.50 = Crucial level is $ 1446-48 unless break could see another up move towards $ 1452 -54 or esle $ 1443. You decide if want to book profit or wait……….Cheers

1:27 PM – EURO @ 1.3038 = Book your profit around 1.3032-38…..Cheers

1:34 PM – should buy gbp at 1.5450 stop loss 1.5420 ?

1:35 PM – View is unchanged. Its your call 😉

1:37 PM – EURO @ 1.3028 = Buy around 1.3022-28. Apply stops if 1.2980 breaks

1:57 PM – sir i booked profit qt 1446.5 where should go short again ?

2:03 PM – I said earlier that if $1446-48 holds could see a test of $ 1452-54. But break of upside risk for test of $ 1458-60 zones……….

 2:23 PM– GOLD @ $ 1458 = Book your profit around $ 1458-60 and sell around $ 1460-62 STOPs if $ 1466 breaks…………..Cheers

3:01 PM -Ok pals, end of another excellent day………………
Cheers until tomorrow……………………
Watch Out ! Bond Yield Helping EURO, not the Economy – April 25


In my yesterday’s post I pointed out that weak IFO will paint gloomier picture for Europe and the data was disappointing as per my expectation increasing the probability of rate sooner than later. US Dollar  that made making small gain lost its gloss after the release of disappointing US Durable data. In real sense Euro-zone rate cut should be bad for investment in Euro, as if will offer lower return and this should weaken Euro. But the flip side is that it increases demand for European bond helps Euro, as we have seen this in yesterday’s auction. Both Spanish and Italian bond yield is gaining strength, which is unnatural and hence, should not last for too long.
However, aggressive bond investors should not forget that the strengthening/narrowing of European bond yield is not caused due to economic stability in the Euro zone region, which remains brittle. It is more or less adjustment of normal yield curve in anticipation of rate cut due to recessionary condition, European bond yield also got boost for Japanese buying of foreign bonds. I consider current bond yield, as opportunity to book profit, as banks in Europe short of liquidity that could be the leading factor for European bond yield to move in opposite direction, which may take another 3-6 months time for sharp reversal.
Another important data due today is UK GDP, which provide further clue about that if British economy is sliding towards triple dip recession or not. Recently, we did see minor economic recovery, but I am not sure if this was enough halt the slide. Though signs are imminent that UK will have to taste triple dip recession.
Meanwhile, any surprise from today’s US initial jobless claims may help in shifting the momentum later in day because then market will start concentrating on tomorrows US GDP report. I think, USD could be the gainers for next 2-days.

Catch me on twitter          @asadcmka 

GMT 3:13 – EURO @ 1.3049 = Euro could make a move towards 1.3060-80 zones before easing. See threat of fall, as break of 1.3010 will see test and break of 1.2975 will encourge for more losses. However, I am not expecting a move beyond 1.3150-60 this week.

GMT 3:17 – GBP 1.5328 = Prior to data I would prefer to take a chance and sell Cable around 1.535-45 zones with Stops 1.5380. Break of 1.5305 will see a test of 1.5290. However, a break 1.5250 is required for bigger fall.

GMT 3:24 – JPY @ 99.37 = As long as US economic data does not show signs on recovery, JPY may not breach 100 levels and is likely to trade within 98.50-70 – 99.90 band. Ideally, there is no harm in picking the top and bottom for trading purpose unless trading range breaks.

GMT 3:27 – AUD @ 1.0319 = Though this is a bit surprising up move, but should exhaust around 1.0350. For the moment do not see 1.0270-90 to surrender

GMT 3:08 = GOLD @ $ 1445.70 =   Gold has potential to test $ 1458-60 before easing. So there is no point chasing gold unless reaches $ 1448-50 before easing during the day. Prefer selling around those levels, with Stops $ 1455. for a drop to $ 1432-34 level. However as long as $ 1426-28 holds, bias will remain on the upside. Break of support is required a fall towards $ 1415.

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