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Modest FED Tapering Possible in September – June 3-7

June 3, 2013

Emphasis last week was on US economy, which is gradually inching up, though the upward momentum may not be at a faster pace, but the growth is steady and I right direction. If we analyze the factors behind past and current growth moves, there was quite a few sold reasons such as impact of tax and sequester that may have slowed the paced.
Despite tough conditions, housing, manufacturing and consumer sector has performed well, 1.245 million in last six-months is a good score be any standard. Reducing QE amount in June is most unlikely think to happen, as quite a few FED members have hinted that they would like to see some more US economic gains before taking a firm decision on Fed’s asset purchase program. But I would take economic data announcement in this quarter more seriously, as I will not be surprised to see the big move happening in September if US economy shows stronger or improved growth. US 10-year and 30-year treasury yield is already at this year’s high that supports modest tapering.
As I said during the week focus should be on US economic indicators, three major events of the week will be RBA policy announcement and if RBA opts to hold rates, it will help Australian Dollar to recover. BOE’s decision on interest rates many not bring any change, neither it is expected that add liquidity. ECB policy announcement will remain big event of the week after Draghi hinting in his previous press meeting that the board is considering negative deposit rates, but couple of ECB board members openly differed with the idea of negative rates to depositors.
OECD has revised down Global growth rate and growth in the ECB zones to remain bleak. It fears that unless more liquidity is made available in the system, growth could get further choked up. There is a huge risk of downward growth revision, which is bad news for Germany because if global growth slows down then it would impact German exports and Germany is engine on Europe. Unemployment rate of 12.2 pct in the Euro zone region is alarming. Therefore, ECB policy statement and Draghi’s press statement should be one of the major driving factors this week and Dovish tone would increase ECB’s chances of negative rates to depositors.             
However, during the week traders/investors will remain glued towards US market for the release of economic data’s. Institute of Supply Management (ISM) is a manufacturing Index that will released on Monday will provide the 1st feeler of performance of US Manufacturing Sector and this data may help in setting the weekly tone. To be followed by ADP Employment, ISM non-manufacturing PMI, FED Beige Book, Initial Jobless Claims and Non-Farm Payroll & Unemployment. I think, finally release of Jobs data on Friday will set the tone for FED’s mood and more discussion on tapering/rollback will take place in next 12-days until FED makes announces its next line of action.

 GOLD $ 1386.50 = Fate of gold this week will depend on US economic data, as odds are not pro gold. Weakness of Indian Rupee and stabile of Japanese stock market may not encourage buyers. Break of $ 1398 will encourage for another upside test and break of $ 1415 for $ 1425. However, risk of down move will increase on if $ 1368 surrenders for test of $ 1342-48 zones.     
EURO @ 1.2993 = Euro will remain a sell on the rise. A move beyond 1.3090 will encourage for a test of 1.3150-80 zones, but is likely to hold or else 1.3240. However, break of 1.2840 will threaten to challenge 1.2730. Range for the week 1.2720 – 1.3240
GBP @ 1.5193 = Cable has strong support around 1.5110-30 levels and is likely to make gains. Break of 1.5298 will encourage for 1.5340. However, break of 1.5040 will confirms deeper fall towards 1.4920-40 zones. Range for the week 1.4920- 1.5380.
JPY @ 100.38 = If Yen holds below 101.80, Japanese currency could make more gains to test 99.55, break will encourage for a test of 99.15. However, Sellers of JPY will be frequently seen as 98.70 should hold. Range for the week 98.50 – 102.40.
AUD @ 0.9569 = Aussie faces a crucial test as 0.9510 is the level to watch, break risk for 0.9450 or losses extending towards 0.9410. However, I suspect that AUD is now close to bottom before another correction takes place. Break of 0.9680 will encourage for a move towards 0.9750-80 zones.  The Range for the week 0.9410 – 0.9780.

 

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

 

6:50 AM  sir shall go short gold at 1397 wid stops 1401??
 7:04 AM  sir aud long at 0.96 .. where to book profit??
7:06 AM  pd, Gold has more upside .AUD will take further dip…………
Its your call………………………….
7:07 AM   same sir shall short gold current level n sl
7:10 AM  $ 1396 = Well, I am expecting $ 1390-92 to hold and as long as $ 1388 does not surrender, there is risk fr a test of $ 1400 zones…………….
7:53 AM  GOLD @ $ 1399 = Book your profit around $ 1399-02………………..Cheers
8:11 AM  GOLD @ $ 1398.50 = If $ 1394-95 to holds, gold could test of $ 1403-05 zones…….
 8:35 AM  euro where to go short?
 8:43 AM   EURO @ 1.3022 =I will tell you when and where to go short………..
For the moment Euro should trade in 1.3005-60 band……………
9:35 AM   sir gold again long at 1397 wid stops 1393.. is it ok?
 9:38 AM   My earlier view is unchanged………………………..Good luck
10:33 AM   GOLD $ 1394 – Buy around $ 1393-94. Stops $ 1390…………
 10:37 AM  AUD @ 0.9655 = pd, close AUD position around 0.9655-60
10:58 AM  ok sir thanks..
1:34 PM  GOLD @ $ 1394.50 = Ok, square your earlier buying around $ 1394.50 – 95……………….
1:54 PM   GOLD @ $ 1395.50= sell aropund $ 1395.50-97. Stops $ 1402
1:55 PM  where to sell gold selling is there in gold
 1:59 PM  I said sell around $ 1395.50 – 97.Stops $ 1402
1:59 PM  sir what euro sir ?
2:03 PM  Well US data was announced earlier…………. bad data…………
Euro could reteast 1.3040
2:04 PM  GOLD @ $ 1400 = Likley to hold $ 1395 for $ 1408-10……….
2:09 PM  sir what about aud now?
 2:10 PM  AUD @ 0.9675 = Sell around 0.9690 Stops 0.9730
2:15 PM   Euro needs to break 1.3045 for 1.3070-75…………..
2:18 PM   GBP @ 1.5280 = support around 1.5250 break of 1.5298 will encourge for 1.5335-40…….or eelse 1.5210
 2:20 PM   AUD @ 0.9705 = Could test 0.9740-50, if holds 0.9680-90……..
2:51 PM   JPY @ 99.55 = Traget met, suggest profit sqauring, thogh could test 99.15……Cheers
3:06 PM  EURO @ 1.3030 – GBP @ 1.5302 = GOLD @ $ 1403.50 ……….
OK all three position is in profit…………
I am leaving, either square all positions or follow my signal. Do not violate as we have got the good begining……Cheers

 Twitter            @asadcmka 

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