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Yellen Holding USD, but Gold & Bond Market to Remain Nervous – Nov 12

November 12, 2013
It was a slow start of new week due to Veterans day holiday in USA. Overall this is not going to be a choppy week witnessed recently because of less important economic events in USA due to lack of tier one data. Though UK and Germany will be releasing some important data that will provide hint about the economic progress in two-countries.
The trend is likely to continue, but on Thursday, market will be more focused to see that if Yellen gets a nod from the Senate Banking Committee on her nomination as FED’s new Boss. This could turn out to be a very important event, if she fails to get the passing marks on her 1st attempt.
The timing is very important due to many unsettled factors in the pipeline and hence, any type of disappointment could once confuse the market. In October, US economy after a long spell of shutdown due to disagreement between government and the opposition was faced with uncertainty and cannot afford more such delays as the economy is struggling for growth and better job condition.
The immediate matter of worry for Doves is FED’s seriousness to reduce it asset purchase. Recent release of jobs data was extremely supportive of Fed’s tapering plan, which brings it closer to decision making and gives little to room for argument after job condition showing improvement. History suggest that November and December are strong months for the economy to show healthy performance and Yellens approval by Congress will be one step forward. Behaviour of bond market and gold price is another trend indicator. Therefore it does not matter that if Fed will start reducing its stimulus package in December, January or March. It is the size that will matter most.

Twitter @asadcmka………

GMT 2:25 – GOLD @ $ 1279.80 = Immediate support in Asia is around $ 1275-77 and may hold, but should exhaust around $ 1285-87. Break of of support level will encourage for a test of $ 1273 levels, as test $ 1266 is a possibility. $ 1292 should not surrender.

GMT 2:32 – EURO @ 1.3393 = The real challenge is to surpass 1.3425-30 levels, failure would see a fall extending towards 1.3360-70 zones, break will encourage for a test of 1.3340 levels or else 1.3455.
GMT 2:38 – GBP @ 1.5968 = Risk for further drop intact as long as Cable holds below 1.5995. If 1.5940-50 breaks GBP could see a fall extending towards 1.5915-20 zones. Or else 1.6020.
GMT 2:42 – JPY @ 99.52 = I will stick to my weekly view that 99.60-80 is the level to watch, as only break will encourage for a move towards 100.30-50 zones. However, there is a possibility of minor losses for Japanese currency that can extend or get close to 100 levels, but risk for correction is possible 99.10 remains an important support levels for JPY.
GMT 2:49 – AUD @ 0.9331 = I can see more suffering for Aussie and the Australian may struggle to move beyond 0.9350-60 levels for 0.9270-80. The fall could extend as long as AUD holds below 0.9390.
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