Skip to content

, , , ,

European Economy is Still Threatening, But US on Recovery Path. May 14

May 14, 2013

Surge in US retail sales number to 0.1 pct against market expectation of 0.3 pct in negative is encouraging news for the economy. The rise in retail sale means people are spending suggesting better job conditions, it also gives boost to production due to increased demand. Fall in gasoline price in previous month may have given more room to spend.

This gives hope that FED is more close to reducing its asset purchase programme, which is also helping 10-year bond yield to surge. The current economic trend in USA is supportive for US Dollar and one good factor that gave push to the JPY to surpass the magic 100 mark though it is unclear about BOJ’s foreign bond buying impact on Japanese currency.

Meanwhile, in the absence of release of US economic data market will concentrate on European economic numbers, as ECB stance is still too Dovish, which is in continuation of its last MPS. I think its a clear sign of nervousness about weak European growth. FITCH has once again warned by reminding of prolonged Euro-zone crisis. Therefore, all eyes will be on today’s German ZEW data to have a feel about economy, as Euro-region’s economy is heavily dependent on Germany growth pace.

GMT 3:13 – GBP @ 1.5311 = I am expecting support around 1.5270-80 zones to hold for move towards 1.5350-55 zones break will encourage for 1.5375 or else 1.5240.
GMT 5:55 = GOLD @ $ 1442.20 = I would still give minor chance for small up move, as could enter $ 1445-50 zones, but $ 1455-57 is the key level that should not surrender for the down move. Fall below $ 1432 will once gain challenge $ 1418-20 zones. 
GMT 5:59 – AUD @ 0.9991 = Real challenge is around 1.0025-50 zones. Only break here would see another 50 pip gain, as risk is for a drop. Break of 0.9920 risks for a test of 0.9970-80 zones. 
GMT 6:08 – JPY @ 101.42 = Now 101.00-10 is the support level only break risks for 100.50. However, a break of 101.80 is required for news lows. 
GMT 3:03 – EURO @ 1.3016 = I would prefer avoiding Long Euro around 1.3040-50, which looks a bit risky. Needs to break 1.3090 for 1.3140. However, support around 1.2940-50 is very strong, deeper fall below 1.2910 is required to more fall.

Twitter  me               @asadcmka

Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: