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FX & Gold Update – Jan 29

January 29, 2014
Here is another proof that why Durable Goods data is considered notorious. Despite report of good commercial aircraft sales in November the government sales number were said to be seasonally adjusted that caused the plunge. Another factor responsible for drop in durable goods number was due to disappointing auto sales in holidays season that pushed it into negative zone. However, the fall is too heavy that may impact 4th quarter GDP, which is due this Thursday. Higher Consumer Confidence number in January of 80.7 was a bit surprising due to environment.
Today is another important day for the financial market, as FED is will be making its decision on interest rate, which is will remain unchanged, but it may stick to its tapering plan and is expected to reduce its bond purchase amount, as stability in the emerging market should give FED confidence to act to reduce its monthly bond purchase to USD 65 Billion. I still think unstable market may not have stopped FED to go ahead with its plan, though by token amount to maintain the momentum.
Meanwhile, Pound Sterling may continue to show its muscles supported by good growth and signs of earlier tightening, despite BOE Governor trying to cool down the sentiment. FED’s addition to its tapering amount may see a dip, but buying on dip will be preferred, as Cable will still find buying interest at low levels.
GOLD @ $ 1253.50 = Gold should stay below $ 1255-57 until FED announcement or may test $ 1262. A push below $ 1243 should extend dip toward s $ 1237. On a bigger picture based on FED tapering decision the two levels to watch are $ 1215 on the down side and $ 1286 on the upside.

GMT 3:32 – EURO @ 1.3654 = Euro may struggle to move beyond 1.3680-90, break would encourage for 1.3725, but care is required if moves above because it can make sharp up move if 1.3750 surrenders. However, I still see Euro easing but needs to push below 1.3610 for 1.3550.
GMT 3:35 – GBP @ 1.6577 = Needs to move beyond 1.6635 to attack 1.6680. However, buyer should emerge on dips and levels to watch is 1.6510 and 1.6450. Prior to European opening another upside is expected.
GMT 3:38 – JPY @ 103,28 = There is nothing much to add as 102,90 should hold. Break of 103.50 is required to enter 103.75-80 zones. Or else 102.65. Major levels to watch is 102.20 and 104.10.
GMT 3:41 – AUD @ 0.8808 = Any move towards 0.8850-80 should be good opportunity for position taking with 100 pip Stop Loss for 200-250 pip gain.

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

Twitter @asadcmka………

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