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Gold Could Correct after Drop – Euro to test new Lows – May 16

May 16, 2013

Despite fall in producer price index to 3-year low that eases inflation pressure market did not react, although fall provides more monetary easing space. Another reading, Empire State Manufacturing survey fell, but this did not have larger impact because its depicts survey of one particular region New York. Better home builders data may have been neutralized the negative impact. In broader sense, so far performance of US economy is quite satisfactory.
Lesser impact could be due to two factors because overall major economic data’s reflect better economic condition in USA. Elsewhere news from other economic front is not very encouraging. Earlier release of European quarterly report once again confirmed economic disappointment in the region. After poor economic performance by Germany the virus has now spilled over to France. Since both the country are top two economies of region this is a worrisome factor and hence, market surely has more confidence in US economy.
However, today’s release of US housing start will tell us more about how many new single homes have been constructed. More important is US initial jobless claims data will tell about first time claims and Plilly data that will indicate about activity in manufacturing sector should provide better picture and unless data enters the negative territory the mood of market will remain Bullish.
While, Mervin King showed some sort of confidence in UK economy and expecting it to perform a notch better and thinks that inflation condition has improved and could be heading for its 2 pct target in next 2 years time. I will give him some space for his courageous talk because this was his last quarterly presentation.  
Bottom line is that Dovish ECB stance is one big factor that is not helping Euro to recover and weaker Euro-zones outlook is helping US Dollar to gain strength.

GMT 3:11 – GBP @ 1.5224 = Needs to make a clear break of 1.5260-80 zones for 1.5325 Or else pressure on GBP could see fall extending towards 1.5130-40 zones on break of 1.5170.
GMT 3:16 – JPY @ 102.23 = Yen weakness will continue and seller will look for opportunity until 101.60-70 resistance holds, but Yen becomes heavy around 102.80-90 zones. 
GMT 3:21 – AUD @ 0.9884 = Pressure to continue on Aussie and unlikely to move beyond 0.9960, as top around 0.9920. Break of 0.9830 risks for 0.9785
GMT 3:24 – GOLD @ $ 1395.50 = The fall could extend up to around $ 1384 zones, but risk for correction will increase for $ 1405-10 zones. However, break of $ 1378 will encourage for $ 1372.
GMT 3:06 – 1.2872 =   I am expecting support 1.2820-30 to hold until mid-day and unless Euro moves beyond 1.2920. Euro should remain under pressure. Only break of support level will risk for 1.2775. While upside break of resistance will encourage for a test of 1.2975.    
Twitter        @asadcmka                for more……………………….

 

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

7:33 AM – GOLD @ $ 1384 = Book your profit around $ 1382-84 and enjoy………..Cheers
7:36 AM – sir where should go long gbp ?
7:38 AM– please follow my post, the guidance is good enough for the moment……..
8:06 AM -at what level do you prefer to go long ?
8:28 AM – should go long gold at 1370 ?
8:37 AM  – Take it easy pd, we have seen enough move in gold today, lot will now depend on NYK mood. But US data is key, it could go either way $ 1335 or $ 1410…….
9:38 AM – sir at current level euro position is zero. if dip euro 1.2850 should buy or wait for up 1.2910 for short stop loss 1.2930 ?
9:50 AM – I do not want to commit in dark……..
When ever I feel comfortable I will give signal………
11:03 AM -Hi sir Short JPY positions… Where to close ? Thanks
11:08 AM – Yen @102.63 = needs to surpass 102.72-78 for test 102.95-00. However, this will only be possible on good US data. Poor data would again see buying of Japanese currency for 102.10………….
This is as of now…..Cheers
 12:34 PM – sir, Long in Euro and Gbp, where to close positions now ? Thanks
12:35 PM – sir what in gold now
 12:35 PM – Overall poor data that could weaken USD 
Should hold Euro 1.2860-70 – GBP range 1.5230-90 & Gold buy around $ 1372-74 Stops $ 1367
12:38 PM – JPY can break 102 for 101.70-80 ?
12:41 PM -Yes, Yen should make small gains. However, if long take quick profit, as short Yen is still preferable as long as 101.40 holds…….
 12:54 PM – sir shall buy euro at 1.2890??
12:57 PM – I still believe 1.2865-70 may hold for 1.2935………
Now you choose the level to buy Euro……….
2:06 PM– sir what about gold now shall go long around 1478 if seen??
2:13 PM – sir should book profit of gbp after fed manufacturing index or gbp can go more up??
 2:14 PM  – when I have gievn top around 1.5290, there is no point asking again where to book profit, it is for you to decide………
2:17 PM – and sir what about gold now??
2:27 PM -Gold @ $ 1487 = Book your profit around $ 1487-89……….Cheers
3:05 PM – OK pals, time to leave. All positions are in profit. Do not take too many chnaces……….. Cheers until tomorrow…………….

  

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