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Yellen Gives 1st Economic Lesson, But Its Different Ball Game This Time – Nov 14

November 14, 2013

Inter–action with my Blog Subscribers……

6:25 AM  Gold @ $ 1287 = No change in view. Profit will be taken around $ 1290…………..
8:04 AM  Your views on gbp and aud, Sahab?
8:06 AM  GOLD @ $ 1284 = Ok, if you went long around $ 1283-84 levels square and go short by picking top around $ 1284-86 with Stops $ 1291………….
 8:10 AM  Hi,  AUD @ 0.9330 = View on Aussie is unchanged as i am looking for weak AUD, if you are following my signal hold your sell and do take profit at given level.
GBP @ 1.6048 = I remain Bullish on GBP, but in next 80 minutes retail sales will provide better direction. i am expecting test of 1.6060-80 zones before release od data.
8:11 AM  GOLD @ $ 1286 = Sell now. stops $ 1291……..
8:27 AM  Thank you Chief, Will be awaiting for ur GBP signal then!!
8:37 AM  Ok, but I do not recomend carrying GBP position until the release of retail sales dat, as poor number will have adverse impact on Pound………..
9:00 AM  JPY @ 99.92 = If Short of Japanese Yen book your profit around 99.92-98 and pick top to buy JPY with Stops 100.10…………
9:14 AM  Sir, Do you think at this point euro is going to drop @ 1.3415-25 zones?
 9:19 AM  Yes my view is unchanged, as few of me collegues are holidng sell positions above 1.3470 for dip.  I will make a post if see see any possibilty of change in trend.
It is just like I switched from buying gold position to sell @ $ 1286………..
9:30 AM  Sell Pound…………for 1.5920-40. stips 1.6050
 9:32 AM  GBP @ 1.6006 = Presfer selling area 1.6010-20. stops 1.6050……….
 9:34 AM  AUD @ 0.9298 = Book your profit around 0.9290-98…………..Cheers
 9:54 AM  GBP @ 1.6008 = Ok we are close to my selling evel, I would pick 1.6020 to sell Cable Stops 1.6050………..
 11:14 AM  EURO @ 1.3425 = book your profit around 1.3415-25……Cheers
11:43 AM  sir gbp looking strong.. view unchanged!!
11:46 AM  Yes, it is kepping tight and break of 1.5970-80 is looking tough…………………
2:31 PM  JPY @ 99.91 = Suggest squaring of Yen position at current levels…………..
12:46 PM  GOLD @ $ 1279 = Book your profit around $ 1277-79……………..Cheers
1:04 PM  any level to buy gold due to yellen speech ojn 15 gmt will his approch will be bullish fpor gold
1:07 PM  Believe me, I have no idea about her speech……………
1:21 PM  next in gold
1:35 PM  Dollar to waekena a bit………
Gold to test @ 1290-92
Euro 1.3480-90
GBP 1.6095
1:55 PM  should buy gold for 90 92
1:58 PM  No, strong resiatance is aroun $ 1286-88…………………
I am watching the moves right now………………..
2:00 PM  I am not recomending any position right now…………
though GBP will test 1.6095-00
2:03 PM  Hi sir,  GBP is not looking to leave its bullish trend as it seems like. Can we see 1.6180 this week as per your weekly forecast ? Thanks
2:18 PM  I think once Yellen is done we could have a clearer picture……….Or else market will remain wobbly……….
To me all looks top around $ 1306 – Eur @ 1.3550 – GBP 1.6150-80 7 JPY 98.50
2:22 PM  But sir if i am not wrong the statement of YELLEN was already published/out. Not sure if the words were already priced in.
I mean the above levels that I have given are the key ones to watch. If holds, US Dollar is liklely to regain its lost strength……..
2:25 PM  Perfect .  Alright.. Thanks
 2:29 PM  Further, you may have noted my todays post that describes more responsibility for her as FED Chief. To talk that she is Dovish in stance is totally different than responding to a Senate member query……….
And not to forget that Bernanke is not leaving until January. So she still has ample of time to take breath at will…………..
2:58 PM  Ok pals, end of another excellent day…………
Cheers until tomorrow………………..


Yellen has giving 1st economic lesson by telling Senate Banking Committee that US economy must improve before FED tapers QE, as unemployment at 7.3 pct is still too high and current rate of inflation is below FED’s 2 pct target that will remain low for sometime and hence strong recovery is required to reduce accommodation, which is why FED is using its unconventional monetary tool such as asset purchase .
This is surely is a clear message that she may want some more time before FED begins to taper, unless economy responds by showing unexpected high level of growth in a very short span of time. But this does not guarantee that FED would continue to buy bond worth USD 85 billion a month, as Bernanke is still FED boss until January 2014.
Market has surely responded after listening to Yellen’s speech that gave some life to Doves in a hope that FED may delay tapering. US Bond yield made small recovery, gold has so far benefited by over 1.5 pct and US Dollar is soft. This is immediate market reaction after Yellen’s 1st appearing in front of the Senate Banking Committee as a chief of Federal Reserve.
Everyone is aware that she is extremely Dovish in her approach, but this time it is going to be a different ball game for her, as she will not be talking to university students or make presentation in front of FED members. The real challenge will be that she has to respond to the Senate members query with sensible and balanced answers and will have to frequently defend FED stance.
Meanwhile, in the foreign exchange market we have seen some unexpected volatility. Euro wobbled after one of the ECB official spoke of negative deposit or more accommodative monetary policy, but Euro recovered sharply on Yellen’s Dovish approach. Euro rise should be temporary as market will soon start looking at the economic numbers and therefore, around 1.3525-50 levels Euro should be a good sell.
However, Pound Sterling that fell a day earlier of soft inflation report made quick gains purely on economic factors, as BOE in its quarterly report said that jobs condition will improve at a faster pace. Today’s positive retail sale could give more life to GBP, which means before the release of UK Retail sales data, Cable is a good bet to buy on dip and profit should be book before data announcement.

Twitter @asadcmka………

GMT 3:25 – GOLD @ $ 1284 = Choppy trading is expected in Asia. Support is around $ 1277-80 levels as this move could extend up to or beyond $ 1287-88 for $ 1290-92 zones, but this rally should exhaust later in the day, unless $ 1296-98 surrenders which is not a favoured move.
GMT 3:39 – EURO @ 1.3465 = We may have seen the top and Euro should hold below 1.3485-90 levels for a dip to test 1.3415-25 zones or else 1.3510-20.
GMT 3:44 – GBP @ 1.6031 = Prefer buying Cable around 1.6000-10 levels for 1.6060-65. Break of 1.6095 will encourage for test of 1.6140-50 zones. However, move below 1.5965-70 risks for 1.5910-20.
GMT 3:50 – JPY @ 99.68 = Japanese currency has good support around 99.95, break could see another 20 pip loss, but I still do not expect major change in sentiment, as break of 99.40-50 resistance would see   test of 99.15-20 zones.
GMT 3:56 – AUD @ 0.9348 = Aussie made some gains on back of weak US Dollar. the up move should be short lived unless move beyond 0.9385, which should not happen as I am looking for a dip, but needs to break 0.9305 for 0.9280.
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