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FOMC Meeting Minutes Could Swing The Market – Nov 18 – 22

November 17, 2013

Inter–action with my Blog Subscribers……

7:53 AM  Sir any intra day position for gbp, EUR and aid???
8:17 AM   Prefred area to buy gold around $ 1280-83. Stops $ 1275………….
8:20 AM   JPY @ 99.95 = Sell around 99.85-95. Try to pick lows……Stops on break of 99.45-50
8:37 AM  JPY @ 99.96 = may test 99.80-85 zones…………
8:55 AM  Sir shall go short GBP at 1.6140???
8:57 AM  You know that I do not recomend going against my call unless it reaches top or bottom. Its your call……….
9:13 AM  JPY @ 99.83 = No change in View preffer selling JPY around currenct levels. Stops 99.40……………
10:09 AM  Sir, Where to book profits on USDJPY?
0:36 AM  Hold on, let NYK enter the market. Need to break 100.15-20 for change of bad towards 100.20-70……
If you are uncomfortable. Plan out a startegy with tiny a 15-20 pips S/L or your place your Selling level as your Stop Loss.
10:41 AM  I am not at all uncomfortable. Just wanted to know the range of booking the profits…
I am holding on it, let us know if any changes…
Thanks, Appreciate it
11:42 AM Hi sir
GBP is coming under pressure now. Have we seen the TOP of the bullish trend?  Thanks
12:05 PM  No, prefer buying around 1.6040-80 zones. stops if 1.6010 surrenders, as looking for one more test of new highs………….
 1:02 PM  Gold @ $ 1278 = BUY gold around $ 1278 Stops $ 1273…………
2:09 PM  GOLD @ $ 1284 = Book your profit around $ 1284-86……cheers
3:01 PM  OK pals, as usual on Monday’s normally cautious trading is witnessed in narrow band, probably market try to determine the trend and not willing to take risk.
Hope, Yen profit was taken around 100.15. Next possible move could dip to test before 99.70-75 zones if fails to surapss 100.02. Howeever of 100.20 is required to test 100.40-50 zones.
If holding position Stops should be applied on break 99.40.
Euro top is around 1.3550-60
GBP to trade in 1.6080 – 1.6150 range……
Position squaring is prefered.
Cheers until tomorrow…………

DAILY COMMENTARY

 

Janet Yellen’s nomination for FED chief was the biggest event of the week, as market paid no heed to the European economic report (3rd Quarter 2013) confirming slow growth. Earlier ECB President Draghi in his press conference said that ECB was forced to cut interest rate due to exceptionally low inflation and economic slowdown. Dragh also spoke about the possibility of negative deposit rate if economic condition does not improve in the Euro region.
Since it was her nomination appearance, Yellen was probably given enough space to speak and answer Senate Banking Committee queries at will. She was not countered for change in FED thoughts, as she avoided tapering talk. Whereas, Bernanke in his last two presentations clearly hinted that FED will reduce the size of its asset purchase, which could even be over by March 2014.
Nominated FED chairwoman in her Q & A session was more focused and specific about faster growth and economic recovery, emphasizing the need to achieve long-term unemployment target rate ranging between 5 pct to 6 pct.
While, answering to questions relating to banking sector regulations and about the possibility of asset bubble, Yellen seemed too confident that FED can easily deflate the bubble through its tightening measure and further added that the Central bank cannot become hostage to the market. This is why to endorse her Dovish view in support of adding more liquidity she may have said that strong recovery will allow FED to do away with its unconventional easing policy and reduce monetary accommodation.
Overall conclusion of her 1st appearance remains Dovish, as she gave impression that she would prefer to wait for economic recovery rather than rushing earlier towards tightening as inflation poses no risk. But one must not overlook at her answer to a query that she had voted 27 times her FED career and had never formally opposed to rate hike. It means that she has the ability to make quick adjustments according to the economic need and does not necessarily mean that she will remain a Dove forever even if the economic condition demands, especially after taking over as FED chairperson she has to act in more responsible manner.
My take on the overall development is that market may start the week with Dovish note and it may take about a week or two to settle down, because by next week onwards sentiments will shift to US economy, which will gradually start picking up. Whereas, European economy is not in a shining mode that will start to spill more trouble and by December market mood will gradually shift to strong US Dollar sentiment.
However, there are quite a few economic reports due to be release this week will provide further guidance. But on Wednesday, the release of FOMC (October 29-30) meeting minutes, which will cover report of US shutdown should not be ignored. A casual report that does not point any concern will be positive.

 GOLD @ $ 1289.20 = Recent release of report for world gold demand by the World Gold Council data has shown fall in demand from investors. But initially gold should get support from Yellen’s remarks that she favors stronger growth before considering withdrawing of her unconventional policy accommodation stance.
The expected down move did occur, but $ 1265 levels was held before bouncing back. This week, break of $ 1298is likely to pose 1st challenge for a test and break of $ 1305-10 zones. Failure to hold could see extension of move towards $ 1325. On the downside, $ 1275-77 is support barrier. Break would help gold to test $ 1250-55 levels.
EURO @ 1.3492 = Recently it has been noted that despite concern shown by quite a few ECB officials and warning that Euro zones economy is heading for softer growth European currency is in good demand. Record suggests that the currency inflow indicates demand for Euro is mainly due Central Banks and investors buying of currency that negates negative European data. But signs are not very encouraging because of low inflation and slowdown that may force buyers to refrain from further buying of European currency or could encourage investors to offload their holdings that may add pressure. Economic data will provide further guidance about Euro-zone economy’s future trend.
Despite being bearish for currency in medium-term, in short-term currency could potentially make small gains and could possible move towards 1.3580-00 zones on break of 1.3550, which should be ideal selling area. However, Euro needs to fall below 1.3420 for resumption of down move. On the up, next levels to watch will be 1.3680. Range for the week 1.3350 – 1.3680.
GBP @ 1.6113 = It has been noted that Pound Sterling often makes sharp up moves on any mildly positive statement from BOE official or on positive data and mostly hangs around support level. This is mainly because of belief that BOE may not add further liquidity through its asset purchase and may exit sooner from its easy policy due to improving jobs condition and easing of inflation pressure. However, I believe it is still too early to celebrate, as UK economy poses many risks. Higher Pound Sterling will surely discourage exports. UK trade is too dependent on Europe and therefore, European woes will not help the cause, instead it will add to gloom.
For this week, bias will be mildly on the upside. Cable has strong support around 1.6020-40 zones may hold for a test and break of 1.6180-00 levels, which will encourage for a push towards 1.6280. However, break below 1.5970 will discourage new highs. Range for week 1.5950-1.6280.
JPY @ 100.15 = Japanese currency will provide strong resistance around 100.90 and unless surrender test of 101.40-50 levels will not be possible. It may challenge 90.50 to test 99.101-20 zones. The currency is likely to trade in narrow range unless band is broken. Range for the week 98.80 – 101.50.
AUD @ 0.9364 = Aussie could surpass 0.9380-90 levels, but real challenge is around 0.9550-80 zones, which may not be easy to clear. Risk for down move will increase once 0.9270-80 surrenders for test of 0.9201-20 zones. Range for the week 0.9150– 0.9580.

Twitter @asadcmka………

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