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Market shows confidence in BOJ – Is 100 Sustainable !– May 10

May 10, 2013

Surpassing 100 Yen mark is certainly a big event that was made possible after reports that jobless claims fell. There is also correlation with US bonds, as 10-year US bond yields rose to 1.83 pct. Japanese currency’s downward move do endorse market confidence and believe in BOJ’s commitment that it seriously wants to correct its economy through monetary measures. It is yet to the be seen that if Yen is able to hold above 100 levels and enters new trading band or if  market gets nervous and current levels is not sustainable. Jpy requires a weekly close of around 101.50 levels, though it can test 102.40-50 zones.

Meanwhile, drop in jobless claims is good news for US economy, as it indicates that fewer people are out of jobs or more jobs were available. The healthy development is that signs are visible that US economy, which was struggling in previous month due to sequester and tax factor is getting back on track.

If the uptrend continues, market will once again start talking of Fed’s unwinding of its asset purchase program, but what bothers me most is the non availability alternate arrangement to replace or unlock quantitative easing money that has been locked.

With improving US economic condition gold may find difficulty to climb. It is already trading around the peak and failed quite a few times to surpass crucial $ 1480-85 levels. Up move will benefit Bull to gain another $ 50, whereas fall below $ 1430 will once again help in resuming its downtrend.

 Catch me on twitter        @asadcmka          More Later……………

GMT 3:14 – GOLD @ $ 1461 = Gold should make a move towards $ 1465-66, where selling interest will be seen. As long as $ 1470-72 is protected, test and break of $ 1455 is a good possibility for $ 1448 or $ 1435. Or else $ 1478-80.
GMT 3:18 – GBP @ 1.5445 =  Strong support for Cable is around 1.5415-20, but needs to clear 1.54-8-90 zones for 1.5515 or else 1.5390.
GMT 3:28 – AUD @ 1.0083 = Saw unexpected sharp drop, but 1.0025 levels should be very tempting and challenging for a correction towards 1.0150-80 zones. But market may not hesitate to tease Aussie for parity with US Dollar.
GMT 3:06 – EURO @ 1.3040 =  is required to break 1.3060 for a test of 1.3095 or else risk will increase for a fall. Break of 1.30 levels would encourage for a test of crucial 1.2980-85 zones.

 

 

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