CurRencieS RanGE TradinG – SeLL GoLD, Mar 23

The was disappoint spilled all over the globe after the Chinese Purchasing managers Index (PMI) number dropped fearing another slowdown queuing up. Global equity market, gold got the hammering and oil market remained nervous. USD, Yen and US Treasuries were the beneficiaries.  .

Europe gave a bad start with news from Portugal going on strike against austerity measures, EU demanding for larger firewall and later during the day economic news flashes coming from France, Germany and UK Europe was disappointing that helped in joining the bearish bandwagon.

Euro that initially had a strong tone during European opening was short lived. In my yesterday’s note I pointed out that Euro needs to break 1.3260 for further gains and it could not, hence the short rally fizzled on bad economic numbers.

Today, there are no major economic events in Europe, so market could trade in a narrow range until New York, as US New Home Sale Data will provide clearer picture of US economy.

This week, BIS reported Central Bank buying of GOLD after the selloff, which was witnessed soon after Bernanke’s statement was not enough to support the Yellow metal. Neither Global development that I have been pointing regularly in my notes is supportive for GOLD.

Hence, for the moment GOLD’s should continue with its downward journey and it may take some more time before the tone turns Bullish.



EURO @ 1.3205 = Euro may struggle to push beyond 1.3235 zones and any up move could be used as opportunity to sell the European currency, as long as it is unable to surpass 1.3255 convincingly. Euro has support around 1.3175, but 1.3135-40 remains key support area to watch.

GBP @ 1.5822 = Cable could still dip to test 1.5765-70 zones, but I will refrain from selling until 1.5750. Prefer buying on dips with STOPS 1.5730 for up move.

GOLD @ $ 1647.50 = Trend remains down, but would wait for small correction. Prefer to SELL around $ 1452-54 area and will apply Stops if $ 1659 surrenders for $ 1640 or $ 1633.


March 22 - BuY EurO & GbP, SeLL GoLD


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Comment by asad rizvi on March 23, 2012 at 4:27am

AUD @ 1.0397 = Hi Jason, in my yesterday’s note to you, I mentioned that key support is at 1.0341, which was held nicely. Now AUD will find resistance 1.0435 and will not be easy to crack, therefore, unless it pushes beyond 1.0460 could be a difficult to attain. However, needs to break support 1.0365 for a retest of 1.0340. Trend remain on the downside

Comment by shehzana shamsi on March 23, 2012 at 5:30am

Greetings Mr Rizvi do u think I can place a buy order at support 1.3130...thank u

Comment by asad rizvi on March 23, 2012 at 5:45am

Euro @ 1.3195 = We may soon test 1.3170-75, but if Euro dips below 1.3140 we could see a test of 1.3110. This may happen in European session.  

Comment by asad rizvi on March 23, 2012 at 6:14am

Jason = European problems are numerous and unending. It will continue to pop out from time to time. Greece will gradually slip out from the community. Portugal has started to make noise. Spain is undone and it will continue to bother. Italy at the moment is taking a breather. Next is French election and do not be complacent about Germany, it has a huge debt. So everything that is linked to the economy will continue to haunt. The world is still full of economic problems. At the end of the USA will become talk of town...Cheers

Comment by sabbir on March 23, 2012 at 6:18am

i guess when huge shorts will build up in euro and gbp and then USA problem will pop up and people will say USD becoming toilet paper.  i guess it is just a cycle.

Comment by Rajendra Panchal on March 23, 2012 at 6:39am

Thank you sir

Comment by asad rizvi on March 23, 2012 at 7:12am

Sabbir = Agreed, but LISTEN CAREFYULLY, I am a very ordinary person. People are interested in short term. No one is bothered about the future. ECB’s balance sheet is now larger than FED. Printing of money is the easiest and only alternate, which no more bothers the world. Accounting changes has become a fashionable art that it more common than a haircut. To be a Financial Expert one should have 3-D quality…..

Did you ever think that Aero plane industry does not crash and daily hundred plane flies all over the sky. Cars do not collide due to hard effort put by the Automobile Engineers. Bridges don’t collapse because of capable engineers have built the bridges. Towers and Buildings do not fall due to high quality of Design by the Architecture and Building Engineers. Water Dams don’t burst due to hard collective effort from by the engineers and experts……..

Did you ever give a thought that comparatively they are all least paid jobs ? Whereas, there is so much Drum Beating about the highly qualified business specialist from Stanford, Harvard, Wharton, London Business School, Columbia Business School, Insead, MIT etc, etc. They are the top paid guys enjoying highest salaries and bonuses. But why always Financial market collapse ? Here is the catch, get this area cleaned up because this is the REAL CAUSE of GLOBAL FINANCIAL COLLAPSE. Thereafter, there will be no major financial collapse ever except for fraud............            


Comment by sabbir on March 23, 2012 at 7:29am

well said

Comment by asad rizvi on March 23, 2012 at 8:13am

EURO @ 1.3240 – GBP at 1.5865 = There is word spreading out about slash in Chinese Reserve Ratio that has pushed Euro higher, because of general belief that Chinese recovery is good for world economy. Such rumor could be short lived, but may provide some more space to currencies to make further gains. Euro could test 1.3260-80 zones, GBP has barrier at 1.5890 and at 1.15915. I prefer to wait to see if I can get another 20 pips before buying currencies and Selling Gold. So watch OUT PALS…..

Comment by Scott on March 23, 2012 at 8:26am

Thanks Asad for the heads up.  Valuable commentary as always.  Thank you.


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