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Currencies & Gold Outlook – May 01

May 1, 2016

Last week’s ECB & BOJ announcement confirms that they are done with easing policy for the time being. Lower expectation of ECB easing and weak inflation in Eurozone region has help helped Yield to make small gain that has supported EURO.
Fed’s somewhat Dovish outlook further dampened USD’s upward momentum. However, since performance of Major economies is still below par, hence unless it makes reversal ongoing current Euro rally is likely to make some more gain before it exhaust.
Market will wait to take direction from the release of US economic data.
While, surge in Pound Sterling is caused by comparatively better economic condition in UK and customer demand opting for a hedge, as BrExit referendum is due on June 23. However, this upward rally could soon halt. Market should be prepared for excessive choppy and volatile condition as we get closer to polls date.  Friday’s US non-farm payroll and unemployment data could be the game changer.

EURO @ 1.1440 = Support @ 1.1240 is the key, which should hold if 1.1320 surrenders. Howver needs to clear 1.1520 for test of 1.1590-20 zones.

GBP @ 1.4608 = Bullish rally in Cable is intact, but the run is probably in its last phase before it exhaust. In Medium Term top is around 1.48-50 zones, as crash could soon occur. Mover below 1.4220 will encourage for 1.3770.
However, during the week only break of 1.4740 will encourage for 1.4820. Preferred strategy would be to pick the top for a test of 1.4340-80 zones.

JPY @ 106.80 = The expected move did occur, as per earlier recommendation made calling for for a quick 5-7 big figure drop. However, from here see Yen finding temporary support around 104.50-80 zones for a retest of 108.20 levels.
In Medium Term strong support is at 110.50. Unless 112.50-80 zones surrenders, there is a risk of further Yen gains to test 100-102

GOLD @ $ 1292.40 = is likely to find buying interest around $ 1260-65 zones, as support is around 1235-40, which should hold. But I strongly recommend taking profit around $ 1320-50 zones and prefer to wait to pick top to sell as strong resistance is around $ 1380.

(Disclaimer applies in my post, which means that the perspective is my personal view. I have made every effort to ensure accuracy of information provided. However, accuracy cannot be guaranteed. This article is strictly for information and not intended for Trade or Business Transaction)

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