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US Economic Indicator Key to Future Trend, Japan Still Wobbly – May 28

May 28, 2013

GMT 2:02  – EURO @ 1.2901 = In the absence of UK and US market thin market activity was witnessed. However, Nikkei 225 that that took the beating yesterday made a comeback and market would like to see if today’s recovery is sustainable until Japanese market close because it is gradually losing its gloss. Lot will depend on the mood of equity market as traders are still trying to pick the clue. Market is also watching Japan’s government bond yield climb. The key to Japanese market activity is liquidity. Squeeze would be bad for Stocks and demand for Yen and gold will be created, but liquidity  availability would weaken Yen and ease demand for gold and respite Nikkei 225.

As the week starts with serious note, market will try to asses the trend from the release of economic indicators that will provide further guidance about FED’s mood after last week’s FED monetary policy announcement that hinted a shift in its policy stance from Dovish to neutral confirming its willingness to taper down if economy continues to perform. Therefore, today’s release of US consumer confidence data will tell more about the individual economic activity. I think this time market will take all three minor economic indicators S&P/Case Shiller Home Price Index, Richmond FED and Dallas FED manufacturing index seriously that may give some feel about the performance of US economy.

Twitter    @asadcmka   for Currencies & Gold Updates

GMT 2:13  – GOLD @ $ 1390 = Initial trend, upward bias in Asia and early Europe before easing. Gold is a buy around % 1385-87 levels and should not surrender $ 1380-82 levels, as see risk for break of # 1396 for test of $ 1400 zones. Break of $ 1408-10 will encourage for more gains, but downside break of support level risk for $ 1372.
GMT 2:19 – GBP @ 1.5084 = There is downside risk for Cable if fails to break 1.5115 for 1.5140 and the losses could extend up to 1.5020-40 zones. However, selling is preferred on the up as 1.5190 should be protected.
GMT 2:25 – JPY 101.86 = JPY needs to move beyond 102.10 for test of 102.45-55 zones, which I do not see happening, as I see risk for more Yen gains. Needs to push beyond 101.20-30 for re-test of 100.85 .
GMT 2:27 – AUD @ 0.9624 = Failure to move beyond 0.9660 risk for drop to 0.9580-90 zones or else 0.9690
GMT 2:02  – EURO @ 1.2901 = Key support level is around 1.2860-70 that should hold for 1.2930 only break will pave way for test of 1.2970. I will not be surprised if Euro eases after hitting 1.2825-30 zones. If Euro fails to make gain then 1.2820-25

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