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Is FED preparing market for the surprise next week ? June 5

June 5, 2013
Interestingly only a week ahead for the next FED’s FOMC, we can hear the noise more loud and clear from both the FED Hawks and the Doves. The difference between past and present is that QE discussion is not restricted in a room. Voting members and non-members are no more hesitant to discuss their strategy openly. This is a tilt is surely towards tapering or reducing the asset purchase amount. Does this mean that the market is given hint that we are close to a decision and we should not be surprised if the FED announce reduction of its asset purchase amount next week or is this just a preparation for the next quarter announcement? Only time will tell the truth. But, after the jobs data announcement, market could become more vocal on discussing QE. 
 
Today my emphasis will be on ADP Employment announcement to get the hint for the coming US Jobs data and FED’s Beige Book should be another good source because it gathers and provides reports on current economic developments and gets input from all 12-FED Districts about the overall condition of the economy. 
 
Meanwhile, Europe will wait for ECB policy announcement, though recent data was better than expectation, Spain’s jobs data showed mild improvement as claims fell, which is due to tourism season, but they are not enough to turn the table. European economy is still hovering in the negative territory and every now and then it gets bashing rather than showing any notable improvement in the economic condition, which does not help the sentiment that always adds pressure on the regions currency.
 
Twitter     @asadcmka             for Currencies &  Gold Update
 
 GMT 3:09 – GOLD @ $ 1408 = I am not sure that if we have seen the top we may see another attempt. But any new high should not survive until tomorrow US payroll release, as gold should be clobbered befored the US Job’s data announcement. In my view all odds are against gold.
Gold is a sell and key is $ 1410-12 that should not surrender or else a move towards $ 1418-20 is possible and break would encourage for test of $ 1425-28 zones.  Fall below $ 1395 will encourage for a test of $ 1387 zones.
GMT 3:18 – EURO @ 1.3083 = Euro may find support around 1.3040-50 for 1.3015-20, only break could see gains extending towards 1.3140-50 zones. However, selling at the top of the range is preferred if seen or else 1.3085-90 before down again. Downside protection is at 1.3110.  
GMT 3:22 – GBP @ 1.5313 = I still see Cable trading in 1.5260-1.5235 band and needs to move beyond 1.5370 for 1.5410. Break of 1.5220-30 risks for more losses.
GMT 3:34 – JPY @ 100.34 = Protection  is around 100.50, unless breaks risk for a test of 100.80-90 or 101.20. However failure would risk for a test of 99.40-50 zones.
GMT 3:37 – AUD @ 0.9633 = Protection is around 0.9605-10 levels, if holds could see a test 0f 0.9665 and only break would encourage for 0.97 levels. Or else 0.9570-80
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