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Rough Ride for Emerging Markets – Interest Rate Hike is not the Cure – Jan 30

January 30, 2014

Inter–action with my Blog Subscribers……

 

4:47 AM   Safil, I do not have the courage nor I am brave enough to put everyone at risk when market is still looking for a tend.
I have given my view/opinion and now its for the traders to decide the entry level and take risk or wait until there is more clarity…………..
5:37 AM  Certainly Sir,  Will wait for more clarity and your signal.
Thank you
6:13 AM  GOLD @ $ 1263 = Market awaits for more clues, as Asian market is on the decline. Europe, specially Turkey & South African will provide more guidance. Meanwhile, if gold fails to move beyond $ 1265-66 levels, we see a minor break of $ 1260 for test of $ 1257-58. Upside break will encourage gold to get close to $ 1270, which looks bleak right now…………..
7:11 AM AUD @ 0.8725 = Prefer selling around 0.8725-30 as 0.8750-60 could be tough to crack…….
7:31 AM  GOLD @ $ 1258.30 = Hold your gold sale, could drift further. I would suggest take chance with sell level as Stop Loss……..
 7:55 AM  GOLD @ $ 1256 = If you wish you can take profit around $ 1254-56. There is room for drop extending towards $ 1245-47 zones………..
It is your call…………………
 8:22 AM  sir what abt gbp now?
 8:22 AM  Do book your profit around 1.65……….
8:29 AM  Hello Sir,
GOLD: Sorry, I just came back after picking up my son from school. Sir, I am holding on to my Sell Position with Bulls horns in Bears hands. 😉
P.S. Have moved my SL to the Sell Level now.
9:14 AM   sir aud view unchanged?
9:17 AM  Yes there is small spike in Aussie. Should hold around 0.8750-60, but do apply Stops, as disciplined trading is requested..Thanks
9:18 AM  EURO @ 1.3598 = Profit should be taken around 1/3590-00…………
 10:55 AM  sir shall go long gbp around 1.6450??
 11:02 AM  No change in my morning in my morning view. I am expecting buyer to hop around 1.6450 or below preferred. Stops loss 1.6390…………
1:13 PM  GOLD @ $ 1251.50 = Shorts still holding Gold position should book their profit around $ 1250-51.50…..cheers
 1:32 PM   GOLD @ $ 1244 = Buy around $ 1242-44……
1:35 PM  EURO @ 1.3572= long Euro around 1.3565-72. stop Loss 1.3520..
1:37 PM   Hold you GBP buy around or below 1.6450……….
 1:48 PM  sir gold sl 38 kept for now is it ok
 1:50 PM  Yes, $ 1237-38 is the key level…………….You are on dot
2:01 PM  GBP @ 1.6510 = Book your profit around 1.6510-20…..cheers
 2:02 PM  sir what about aud now!!
 2:03 PM  nothing in Aussie now…………..
2:06 PM  shall go short around 0.88??
2:14 PM   pd, today’s Aussie up move was bit surprising after weak Chinese PMI and fall in iron price to 6-month low, which means demand fro China is low. Anyhow I still do not see any reason for strong AUD. Next level to watch is 0.8820-40…….
2:15 PM  hold buy or quiet
2:18 PM  Gold is at a tricky level right now because if $ 1237 holds it could move towards 4 1244 or $ 1247. break means $ 1232……..
3:00 PM  Gold to test $ 1246-48 zones………
 3:03 PM  Ok pals, you have 2-positions in Gold $ EURO. I prefer closing before I leave.  If you wish to hold do apply Stop loss.
Cheers until tomorrow………

 

Daily Outlook 

Finally ! There is no more confusion about FED stance. Bears are no more defending Janet Yellen that she is a strong Dove and will fight until her last breath against tapering. Bond market did not collapse as the bond Guru’s were making claims of crash of bond market. Gold did not plunge after the 2nd leg of tapering announcement. This is purely smart play by Bernanke and his policies that had well managed the market to get out of rescission and for creating conducive condition for the jobs market.
So far it has been proved that all the financial market Guru’s were wrong in
there assessment. There were probably adding pressure to delay tapering because they have been minting profits against almost free borrowing at the cost of depositors.
From US perspective the meltdown in the emerging market is not a matter of concern for them, as FED may have a certain target to improve financial market condition and bring down the unemployment rate, which down to 6.7 pct from 9.9 pct since December 2007 and after attaining the desired level they are now trying to fix their books.

Asia made a bad beginning, as stock market is melting right now. Release of weak Chinese HSBC Manufacturing number has added more gloom. Market will be watching European market and continuation of trend could be disturbing for the financial market. This is because FED tapering means no more additional cheap US Dollar funding that can lead to liquidity crunch, which will add sever pressure on foreign exchange.
For next few days, all eyes will be on the emerging market. To defend their currencies, India was 1st to hike its rate followed by Turkey and South Africa to defend their exchange rate. The problem occurs for a country that is faced with with current account and totally depend on foreign funding. Hiking of interest rate does not feed the belly, which requires funding and this is what happened 21 years ago when Britain decided to exit from ERM, Pound Sterling plunged despite 2-rate hike on same day by nearly 5 pct. Cost of high interest rate is unimaginable for any economy that neither serves the purpose to defend currency that requires funding. Famous George Soros made US one-billion by betting on Cable. So watch emerging market for moves.
Bottom-line is that tone is bearish and market is uncomfortable, as they are focusing developments in the emerging markets. Asian start is threatening. Market to remain jittery and confused and nervous unless there is more clarity about the global market behavior, as FED has given a clear direction that it will not deviate from its task.
GMT 3:38 – GOLD @ $ 1262.50 = The only cause of support for gold is due to uncertainly in emerging markets. However, tapering has given more confidence that will help to achieve my medium to long-term target of $ 1000.
During the market will remain nervous, choppy and directionless. Break of $ 1268-70 will be required to test $ 1275-80. But doubt if that level will be reached unless financial market condition severely deteriorates, as I amexpecting fall extending towards $ 1240-45 zones.

GMT 3:41 – EURO @ 1.3655 = Euro should hold below 1.3698 or else will test 1.3720-25 zones, as break of 1.3590 is required for a test of 1.3550-60 zones.
GMT 3:47 – GBP @ 1.6558 = GBP may hold around 1.6590 levels or else another test of 1.6630 cannot be ruled out. A break of 1.6590 is required for a fall to extend towards 1.6450 zones before buyers could re-emerge.
GMT 3:56 – JPY @ 102.32 = Needs to surpass 102.75 for 103.30-40 zones or else break of 101.50 risks for 100.25.
GMT 3:59 – AUD @ 0.8735 = there is more pain for Aussie, as it may struggle to move beyond 0.8780. Downside risk for a test and break of 0.8670 levels for more losses.

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

Twitter @asadcmka………

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More Later…………………..

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