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Draghi’s Proactive Guidance Approach – Nov 8

November 8, 2013

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Lowering of ECB’s benchmark Refi rate to 0.25 pct was certainly surprise for me like many others, but it further confirms that the current European economic recovery is not enough, as it poses further risk to the region. Another factor could be that low level of Euro-zone inflation gave good reasoning to slash rate. Surely, despite refusal by Mario Draghi that the slash was not linked to strong Euro. The European currency becomes less attractive after the rate cut.
Since, exports from Europe minus Germany is weak, unemployment remains a matter of concern, which is at the highest level, weak Euro will make European goods more attractive. ECB rate cut decision brings it closer to switch to negative interest rate scenario for the depositors if the economy fails to pick-up. Though Draghi said that they did not discuss LTRO in any significant way, but with cheap funding facility it will become more effective and more importantly it will provide enough breathing space to the borrowers when offered.
Today’s US job data is another important event. But let us not forget that despite all the negative talking, US economy grew by 2.8 pct in 3rd quarter that should support overall annual growth figure when all four-quarter figures are being added, though there can be a debate that the high GDP is caused by build up of inventories. It is not easy to calculate the non-farm payroll, which can have wide range from  50.000 to 140.000 and unemployment at 7.5 pct. After shutdown drama, poor data is already priced in and traders will start talking of March 2014 tapering, but anything above 125.000 and unemployment rate below 7.4 pct will give Bulls big smile on their faces. However, if the headline numbers are too disappointing it will have limited impact because every trader/investor knows that the number is not real and therefore should be temporary.

Twitter @asadcmka………

GMT 2:59 – GOLD @ $ 1309 = Prior to Jobs data release I am expecting Gold to hold below $ 1318 and may exhaust around $ 1311-13 for a dip to test $ 1305 possibly $ 1302-03.
However, in a broader picture a move beyond $ 1332 is required for $ 1350. On the downside break of $ 1285 will confirm further losses that can extend to test $ 1250-55 zones.
GMT 3:09 – EURO @ 1.3408 = Euros top stop should be around 1.3440, with support around 1.3370. But data could drive the market either way. Poor jobs number could push European currency towards 1.3490, break will encourage for more gains before dropping. However, fall below 1.3310 is required for more losses.
GMT 3:13 – GBP @ 1.6092 = Buy in dip is preferred, only break of 1.6065 will encourage for test of 1.6040 zones. Though 1.6120-50 will be tough to crack. Ob a broader prospective 1.5970 should not surrender, but needs to clear 1.6190 for more gains.
GMT 3:18 – JPY @ 98.21 = To give you a feeler about Japanese currency, non-farm payroll below 100.000 will bring it closer to 97 levels and anything above 130.000 will weaken JPY to test 99.20. A number beyond 150.000 may challenge 99.70-00 zones.
GMT 3:23 – AUD @ 0.9457 = Bias is on the downside and should hold below 0.9480 for a gradual move towards 0.9420 or 0.9405. Apply Stops if 0.9510 breaks.

Inter–action with my Blog Subscribers……

4:21 AM  Asad Sahab please let us know whatever non-farm payroll turns out to be and also your suggestion on JPY… Appreciate your Vital Info Sir… Thank you…
7:02 AM  GOLD @ $ 1310.50 = Gold could still hit $ 1314……….
8:10 AM   GOLD @ $ 1308.50 = Gold has support around $ 1304-6, may hold for another upside test $ 1300-02 should not surrender………
 9:01 AM  GOLD @ $ 1312.50 = Book your prifit around $ 1312.50-15 and pick top to sell with Stops $ 1322……….
9:46 AM   GBP @ 1.6080 = Not comfortable with Cable could test 1.6035-40 on break of 1.6055, should hold below 1.6110…….
1:16 PM  EURO @ 1.3435 = Book your profit around 1.3437-450….cheers
1:17 PM  If short GBP square @ 1.6080……
 1:17 PM  GOLD @ $ 1610.70 = Do not carry gold poition square now……………
1:18 PM  i mean @ $ 1310.70…
 1:30 PM   Buy USD Sell Gold ..  Sell JPY
1:32 PM   GOLD @ $ 1295 = Sell with stops $ 1303
 1:35 PM  GOLD @ $ 1295 – Gold could test $ 1298-02 before down……………..
1:36 PM   Looking for test of
GOLD $ 1280-85
Euro 1.3420-40
GBP 1.5980-90 = Buy GBP
JPY 98.80-90
 1:38 PM selling of GBP is not recomended its a buy on dip……………….
1:48 PM   No change in view…………………..
 1:51 PM  AUD @ 0.9402 = book your profit around 0.9395-02…cheers
2:02 PM Sir ,  I have sold Gold @1293 Set TP @1280 SL@1306. Regards,
2:06 PM  Why you did not sell around 1296-98…..
It is important to understand that if trading with me you have to to keep up the pace with me. It is not possible to comment on positions taken you/others beacuse that confuses others that have taken position on my view and I do that afte lot of analysis. Thanks
2:21 PM  Hi Sir,  Where to buy Euro ?  Regards
 2:23 PM  If you went short suggest taking profit around 1.3320-40……………….
 2:25 PMccSir Gold @1289 where to take TP
2:26 PM   around $1280-85…………….
2:27 PM  Cheers, i know you made huge profit……………..
2:30 PM  Hi sir, Shorts running in good profits
1307 Gold
1.3411 Euro
And Finally excellently from 97.89 and 97.95
2:31 PM
Good going as always……… Do not hang for long start taking profit…………………….
2:34 PM   Alright but can i hold GOLD for next week ?
2:36 PM   Yes, with overnight Stops @ your buying level…………………but if get opportunity to buy around $ 1275-80 tonight then you should take profit………
2:37 PM  ok Got it
Thankssssss   😀
 2:40 PM  JPY @ 98.85 = Book your profit around 98.85-95….Cheer
2:49 PM   didnt want to spoil another good profitable day and as per your advice ” NO GREED ”   Closed all  1284.55 1.6001 98.886 and (1.3355) * 3
Great finish of WEEK…..Thanks 😀
 2:51 PM  Suggest profit taking and closing all positions………..
cheers to all…………………………
2:54 PM   It ceartainly was a great week, if you have followed my signal religiously…..
Have a nice weekend…………………….Cheers


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