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Will US Payroll Data Renew Tapering Debate ? – June 7

June 7, 2013

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

10:53 AM  sir which level you recommend to buy gold prior to data?
10:58 AM  I would prefer to wait for Jobs Data…………………………………..
11:34 AM   sir went short euro 1.3270 is it right sir ?
11:50 AM   I will prefer squaring all positions before the data……………
12:31 PM   GOLD @ $ 1409 – sell gold
12:36 PM   Dollar will gain against Currencies & Gold. Data is OK………. 
12:44 PM   gold sold 1408 hit stop los 1413 should again short
 12:51 PM   Gold book profit around $ 1398-00………….
 12:52 PM   GOLD @ $ 1398 = Long around $ 1396-98. Stops $ 1392
 12:54 PM   EURO @ 1.3213 = Prefer top book Euro profit around 1.3208-13
1:02 PM   GOLD @ $ 1397 = Square Gold position……….
 1:11 PM   where should go long euro ?
1:15 PM   sir,  what should be the MAX of YEN today?  If sold under 96. Thanks
1:20 PM   sir, gold break 90 now where u see gold bearish today
1:34 PM   gbp i sold where should book profit ?
 1:37 PM  Since US Dollar weakness was based on speculative strength as there was no economic recovery in Europe, whereas US economy is overall doing fine. I do not see Gold or Currencies making big gains.
Gradually, market will again start taking of FED FOMC meeting and economic data. Europe has a challenging task, but US coud make a comeback next week……………
1:39 PM   GBP @ 1.5508 = Cable has resistance around 1.5550 and shold hold around 1.5470……………..
1:44 PM    Gold strength was largely based on hopes of poor Jobs data that should delay tapering talk. Gold Bull will once gain start worring and we could here tarders taking that FED may consider reducung Asset purcahse amount. Such talks will extert pressue on gold. 
We may have seen $ 1425 top yesterday. Now only break above $ 1392 may encourage for a test of $ 1399. Support is at $ 1375……
 1:46 PM    EURO needs to clear 1.3265 for more gains. I doubt if Euro can retain its strength and we could see a gradual slide towards 1.3175…………
2:17 PM   JPY @ 97.23 = Moeen, Prefer book rpofit around 97.30-50. Yen needs to push beyond 97.80-90 for more weakness, which i doubt may not happe
 3:01 PM   OK pals, have a great weekend……………..
Cheers………………………………………………………..

 

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GMT 3:27 – EURO  @ 1.3253 = Before US jobs data I would not hesitate to sell Euro around 1.3280 levels with STOPS 1.3325, as I am expecting gradual dip towards 1.32 zone. However, the key to watch will be break of 1.3140 on the downside and 1.3350 on the upside. Despite poor data anything above 1.3350 would be a good sell.
GMT 3:32  – GOLD @ $ 1413.50  = I am expecting volatility in gold today that could trade in wide range between $ 1405-25 prior to US payroll data. However, Key today would be $ 1390 on the down side and $ 1440 on the upside.
GMT 3:37 – GBP @ 1.5597 = Only break of 1.5640-50 risk for more upside towards 1.5740. However, could see some corrective move but push below 1.5460 will accelerate the fall. 
GMT 3:44 – JPY @ 96.30 = Sharp gain of Yen could extend 95.50-70 zones and only failure to hold this level risks for test of 96.80-90 zones. While break above 97.80 will stabilize the currency.
GMT 347 – AUD @ 0.9486 = Unless fall below 0.9420 Australian currency may get temporary respite. But needs to push above 0.9580-90 for more gains. After mild correction Aussie should fall as all odd are against AUD. Next target could be 0.9290 on break of 0.9370, possibly next week. 
GMT 3:17 – EURO @ 1.3253 = Before US jobs data I would not hesitate to sell Euro around 1.3280 levels with STOPS 1.3325, as I am expecting gradual dip towards 1.32 zone. However, the key to watch will be break of 1.3140 on the downside and 1.3350 on the upside. Despite poor data anything above 1.3350 would be a good sell.

I did warn that wild swing is possible. Recently I have noted that after MPS announcement and during/after Draghi’s press appearance market has the tendency to react sharply. Yesterday too, Draghi suddenly expressed better feelings about the European economy and he did not sound too Dovish simply because last 10 – days economic indicators have shown improvement (though below the required benchmark). But what baffles me is that despite improving economic conditions, he still sees further drop in GDP and hence, growth has been revised down because the European economic condition could worsen this year. So how can you be less Dovish after downward revision of GDP growth.

I think market behavior is speculative, as Draghi has clearly stated that the economic performance this year will be poor, fearing further contraction of economy. He talked of both the possibility further easing and possibility of implementing negative rate on deposit, which speaks of risk Euro-zone faces. It is surprising that the market has responded on his expectation of better economic condition next year, which makes little or no sense. Again it’s all about perception and it is for the market that decides the trend.

I do not want to discuss too much about today’s release of US jobs data, but in my view I do not find any reason for jobs number to deteriorate, as US jobless claims too was not a worrisome number. Market is in a mood to react sharply and hence, any deviation in unemployment could spark volatility. My bet is that even a figure of 170 K will see air coming out of balloon and everyone will start discussing next week’s FED FOMC meeting.

A word on currencies, we have already seen change in trading band and I still have a feeling that the currencies have over stretched.US bond moves will also be keenly watched. 

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