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Beware Doves – FED Beige Book Is Encouraging – Jan 16

January 16, 2014
FED Beige Book that collects data from 12-Federal Reserve Districts further confirms that the US economy expanded at a reasonable pace in large part of the country in November 2013 and there good chances of improvement in coming in the days ahead. It is quite encouraging to know that overall growth in real estate and manufacturing continues to enjoy uptrend due to large orders in aviation industry and big rise in auto-sales. Hiring pace is increasing and people are shying to spend.
It is quite encouraging that US economic growth in on ascending mode and continuation of of such trend will give further boost to the economy. The year 2014 began with a firm tone, we have seen most of the FED members opting for a Hawkish tone unlike that we saw in 2013. One of the non-voting FED Chicago President Charles Evans went to such an extent that he expects unemployment to fall below 6 pct in 2015 though committing to keep low for longer period of time.
Today’ release of US inflation data and US initial jobless claims should be a good guide, as both tops FED agenda, since higher inflation and stable economy is FED’s priority. General view about the US economy is that despite poor jobs data for which weather should be responsible, otherwise overall trend is still solid like a rock.
GMT 3:21 – GOLD @ $ 1240.50 = I would try to pick top and sell around $ 1240.50-43 zones, as only break $ 1248-50 would threaten for more gold gains, which is not a favored move for $ 1232-34. Break will encourage for test of $223-25 zones.

GMT 3:28 – EURO @ 1.3620 = Break of 1.3525-30 is required for a move towards 1.3655-60 zones. But beyond that levels, which is a remote possibility, Euro is a sell. However, needs to push below 1.3570-75 for next barrier around 1.3540-50 levels.
GMT 3:34 – GBP @ 1.6371 = Pound should be capped around or below 1.64 levels for a move towards 1.6330-35. Break will see will fall extending towards 1.63 zones. Protection around 1.6450-60.
GMT 3:39 – JPY @ 104.90 = JPY has entered a tricky zone 104-90-00 may hold for re-test of 104.60-70 levels, but should hold 104.40 or else could see a push towards 105.30-50 zones, where JPY has strong support.
GMT 3:44 – AUD @ 0.8812 = AUD should hold 0.8770 for a test of 0.8850-60 zones. However, if support level breaks 0.8740-50 may hold.

Dec 11 -Gold 2014 Target  Break of $ 1000 for $ 800.

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