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Sentiment To Shift Towards Yellen & Then FED FOMC Minutes – Oct 10

October 9, 2013

As US debt limit shutdown is the topic of discussion, let me begin with a small note on Yellen, as according to one of the White House official, she is likely to be nominated to replace FED Chairman Ben Bernanke. She is considered a strong Dove and many in the financial strongly believe that will maintain Bernanke’s extremely friendly Monetary Policy Stance (MPS). What everyone is forgetting that she is a true professional. FED’s loose MPS is policy decision not taken by an individual and is only decided with the consent of all the 12-Voting members with a clear majority.

Bernanke could be an ardent supporter of easy monetary policy, but he it is not his sole decision maker and that is why he was compelled to start tapering talk that FED could taper. Scaling down of asset purchase will be FED’s decision based on majority votes. If Yellen is nominated, then growth and job creation will remain a big challenge and her priority.
Back to shutdown, as we are getting close to Oct 17, if US government is unable to resolve the issue and fail to raise the debt limit by that time, it will severely impact the US domestic financial market as well as foreign borrowers. China and Japan have shown grave concern and are worried about the unresolved US default issue that has entered 9th day. Partial shutdown has already started hitting the US economy, which will be known at a later date.
However, though focus may have been mildly shifted towards Yellen’s nomination as Fed Chairman, there is no respite for the equity market, all over the globe stocks are nervous and are declining. But by New York opening traders will once again start concentrating on the release of FED FOMC minutes. In such an uncertain situation when Gold and JPY are not enjoying heavenly status market may be looking for investments in CAD, Aussie and Skandi.

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GMT 3:05 – GOLD @ $ 1317.70 = Gold will remain choppy. Only break of $ 1314 could see a dip towards $ 1308-10, before up or else $ 1301-03. Meanwhile break of $ 1325 is required to test $ 1330. Move beyond $ 1335 risk for sharp up move , while on the downside failure to hold $ 1285 risk for bigger fall. (Refer weekly outlook for clearer trend).
GMT 3:12 – EURO @ 1.3565 = Suspect that failure to move beyond 1.3595-00 risk for a drop and break of 1.3540 for a possible test of 1.3520 zones and break here risk for 1.3485 or else 1.3650-55.
GMT 3:17 –  GBP @ 1.6067 = The key level is 1.6090-95, which may hold, Break of 1.6010-20 risks for 1test of 1.5980-90 zones or else 1.6130.

GMT 3:22 – JPY @ 96.27 = Yen needs to fall below 97.60 for more losses or else break of 96.80-90 will encourage for a test of 96.50 zones. Break of 96.30-40 will see sharp gain for the Japanese currency.
GMT 3:26 –  AUD @ 0.9430 = Aussie has support around 0.9405, should hold for test and break of 0.9450 for 0.9470-75 or else 0.9380-90 before up again.

Inter-action with my Subscribers during the day…..

 

7:20 AM   GOLD @ $ 1317 = Fialure move beyond $ 1320 risks for a test of $ 1313…….
8:02 AM    hi sir, Do u recommend buying Euro here around 1.3520?  Thanks
8:02 AM    hi sir,  Do u recommend buying Euro here around 1.3520?  Thanks
8:32 AM    sir what about gbp after data!!
8:34 AM    GBP @ 1.5983 = Book yuor profit around 1.5973-83………………Cheers
 8:35 AM   GOLD @ $ 1320 = Sell around $ 1321-23. Stops $ 1326…………
9:11 AM    GOLD @ $ 1308 = Book your profit around $ 1306-08…………
9:11 AM     GOLD @ $ 1308 = Book your profit around $ 1306-08…………
10:27 AM   $ 1316-17 should hold for possible new lows………….
11:27 AM   sir,  GBP view please.  Thanks
 11:48 AM    GBP @ 1.5955 = If holds 1.5910-10 could test and stretch beyond 1.5995-00 for 1.6025 or esle 1.5885-90
11:52 AM    EURO @ 1.3512 = Prefer long Euro around 1.3498-08 Stops 1.3470
 12:08 PM   gold short position hold
12:15 PM    GOLD @ $ 1308 = $ 1305-08 is the key level. If breaks $ 1295-00…..
Market will remain choppy in gold, likley move both ways. So trade with strategy..
 1:10 PM   next in gold selling level any
2:18 PM     GOLD @ $ 1297 = Ok now book your profit around $ 1295-97 and Pick the lows with Stops $ 1289………Cheers………………..
 3:02 PM   Ok pals, end on of another perfect day………….
Cheers until tomorrow……………….

 

 

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