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Weaker Global Economy to Help US Dollar – Gold to Suffer More Losses – May 15

May 15, 2013

It seems that the economic gloom is all over the globe, Asian and Australasian economies too are not spared of this contagious disease, as policy makers sweetener has already become less effective in Europe. The crack seems to be appearing in China, Australia is prone to developments in China. Size of other South Asian economies is too small to to help the cause. In present market condition focus has shifted to USA, steps taken during last past 4-5 years is reaping result.
Though US economy has plenty to worry as it is planing to reduce/halt its asset purchase plan, as unwinding should be the most difficult task because financing through other means is almost impossible. Slow pace of growth and high unemployment are the immediate challenge faced by the economy that requires quick correction. Despite all the difficulties, market confidence is gradually shifting towards USA in a hope that in worst global condition USA remains a better proposition, as its economy is responding to the steps taken by the FED.
European trouble is spreading, as it is already faced with an unresolved Bank Capitalization since last many years and now its economy is in constant declining trend and is unable to recover. After yesterday’s disappointing ZEW survey data, market will be focusing on the release of German GDP for some respite, which will be followed by release of Euro-regions GDP number that may give the jolt.
Couple of important data will be released in UK, as unemployment report will be followed by BOE’s quarterly report. Cable that has been suffering since last 3 or 4 session may take a breather if unemployment signals better job condition. 
However, this may not be enough for the day as US labour department, Federal Reserve and National Association of Home Builders will be releasing economic data’s that will further confirm the pace of economic growth in USA.

Twitter                @asadcmka   for FX & Gold Updates

GMT 3:25 – GBP @ 1.5222 = Prior to data, support 1.5170-80 should hold, but 1.5140 should not surrender or else test of 1.50 levels could be a possibility. However, test of 1.5310-20 zones is a good possibility.  
GMT 3:28 – JPY @ 102.18 = The key is 101.50-60 for more correction, failure to break below risks for a test and break of 102.50-60 for 102-90-98 zones.
GMT 3:33 – AUD @ 0.9897 = Though I have recommended buy around current levels in my weekly post, but I am discouraging buying of Aussie since last 2-days because of increased pressure as AUD will see more fall. Should hold below 0.9950 and could get exhausted around 0.9930 for test of 0.9820-40 zones or else 0.9990.
GMT 3:37 – GOLD @ $ 1426.80 = I do not have love for gold unless break above $ 1455. However, unlikely to move beyond $ 1435-40 zones today as pressure to mount. sell around $ 1430-35 zones, break of $ 1412 will encourage for a test of $ 1398-03 zones. Target $ 1370-75 is intact.
GMT 3: 17 – EURO @ 1.2932 = Euro needs to move beyond 1.2970 for 1.3025, as downside risk has increased as I am expecting fall below 1.2905 that will see a visit to 1.2870-80 zones. Break would encourage traders to test 1.2825-50 zone.

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

6:32 AM – GOLD @ $ 1415.50 = Book your profit………..Cheers
 6:44 AM – GOLD @ $ 1414 = Needs to drop below $ 1408-10 for bigger fall or else re-test of $ 1420-22 levels……….
8:22 AM -sir before the data should go for short sell 1.5239 stop loss 1.5270
8:26 AM – why do you want to take unnecessary risk.
Today I gave a very clear trend in Gold-AUD-GBP & JPY & Euro…
Hope you have enjoyed trading or missed out…………
 8:35 AM – Hi sir
If long in GBP then wait till 1.53 to take profit or earlier? Thanks
8:37 AM – book your profit do not gamble in dark………….
9:33 AM – after boe inflation report view remain same about gbp ?
 9:34 AM – sir euro should buy at 1.2890 stop loss 1.2870 is it right ?
 9:35 AM -Yes, view uncahnged, but may struggle around beyond 1.5325
9:36 AM – I would still wait to pick top to sell Euro……………..
9:37 AM -and about euro sir ?
 9:39 AM – pd, I have already answered on your EURO query about a minute ago………….
11:45 AM – sir what wrong with gbp every data comes positive still remain under pressure ?
12:20 PM – you do not need rocket science. After reading my daily post and trading strategy you and all others should have better understanding about the market behaviour. Trading is certainly more than jobbing and if you want to grow you have develop/improve your knowledge/trading habits. It will help to improve your trading ability.
Trading is not all about data announcement. Take e.g of today’s UK data. You are missing MERVEN KING’s speech that was more important event than the data. He was providing bigger picture, he showed his concern about growth and inflation. He is was telling the importance of growth in construction sector that has impacted US, Spanish and Irish and why UK is not faced with similar situation because there was no construction boom in UK. 
Trading activity does not end up with FED or Mario Draghi. The point that I am try to convey is that learn and look into other factors that it is impact the overall market.
And yes, he is concerned about UK’s growth, which tell all about economic difficulty.
Many times currencies and gold is driven by some unknown factors such as large orders/position taking or squaring by funds that shifts sentiments. 
Bottom line is discipline after good entry level. You do not have to necessarily sit on a trade for 24-hours. Enter when you have a firm view and square at the right levels. Do apply Stops, you will get another chance instead of sitting with a painful position and at the end of the day, week or month you have to end in positive.
Thanks
12:34 PM -GOLD @ $ 1410 = If fails o dip below $ 1407 could see test of $ 1415-18 levls. Euro could test 1.2830-40 if hold 1.2840 GBP could test 1.5260-80 levels, should hold 1.5305
1:10 PM -sir gold bought at 1410 stop loss 1405
1:12 PM – Ok, but $ 1416-18 is tough right now………..
 2:06 PM– sir i bought euro at 1.2860 stop loss 1.2835 should wait for up or square ?
2:11 PM – Euro @ 1.2868 =pd, sqaure Euro position because it may remain locked in 1.2835-85 range and unless breaks 1.2895 Euro could remain depresed. Break would see top around 1.2915
2:28 PM– GOLD @ $ 1406 = Looking good to test and break $ 1400 for $ 1393-95, if stays below $ 1410-12
2:31 PM – GBP @ 1.5228 = Hope you have booked your profit around 1.5265-68. Cable could dip to test 1.5185 on break of 1.5202
2:42 PM– GOLD @ $ 1395 = Hope you have booked your profit around $ 1393-95. Cheers………………Next stop is at $ 1388
 2:49 PM– sir i short gbp at 1.5228 where should close this
2:52 PM– With STOPS 1.5228 = around 1.5180
2:53 PM – sir gold booked profit and went long at 1395 stop loss 1387 where shoud clear this ?
2:55 PM – GOLD @ $ 1398 = Hoevring around top should hold below $ 14405 for test and break of $ 1390
3:02 PM– sir i cleard positon at 1398
 3:04 PM – Ok pals, hope you all had a great day……………..
Cheers until tomorrow

 

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