EuRo & GoLD tO tEsT nEw hIGhS - July 2-6
Measures announced by the European leaders after the summit in Brussels proved to be boon for Bulls waiting for their turn to respond to the ongoing Bearish spell and they returned to hit back the market with vengeance.
European announcement gave boost to the crude oil prices that surged by nearly 9.5 pct, global stock market jumped by 1.4 pct to 6.4 pct, gold gained by over 3 pct and Euro enjoyed 2 pct bull run during the day.
It was German Chancellor Angela Merkel’s nod with u-turn of her policy that paved way to
reach some sort of understanding, probably realizing that she cannot continue to afford with her one-sided stance by always refusing to her European partners demand.
She finally succumbed to the Spanish and Italian demand for softer austerity policy and thus had to back out from her earlier demand for budget cuts to support growth ( Euro 120 billion growth pact proposed by French President Hollande ) and easing of lending rules to the European banks faced with capitalization problems. The deal is likely to help reduce the borrowing cost as well.
To obtain final approval she was quick to rush home and get the parliament’s approval on European bailout funds and after tough negotiations she had to compromise on some of the domestic tax matters that could weaken her politically. But she was able to get the required two-thirds majority votes for permanent Euro rescue fund, the European Stability Mechanism (ESM) and the fiscal pact so that she can avoid constitutional challenges.
This approval of Bundestag will allow direct pumping of funds into the struggling the European Banks, which means Spanish banks borrowing ESF funds will not increase country’s (Spain’s) debt. Importantly, the lending will only be possible after the ECB establishes European Banking Supervision Mechanism that could take time.
But who knows that there is another bombshell ticking in Euro-zone, so allow this move to happen and enjoy few more strides, then adopt a cautious approach and don’t be too impressed and complacent with the current ongoing European party. Market will soon realize that they are flying too high and are short of gas resulting sharp fall.
I would like to remind that banks that received LTRO funding are faced with hardship. LTRO 1 and then LTRO 2 a total of over Euro 1 trillion was not enough for the European market, what is the guarantee that ESF fund will be enough to resolve European issues.
Therefore, just keep a close watch on the European bond and Credit Default Swap (CDS) that will provide more clues about the future trend of European market.
There must be lot of political talk amongst the European leadership, as they must be proudly talking of reaching an understanding on growth and willing to spend Euro 120 billion. Do not forget that Spain and Italy will provide 30 pct of the ESF money. Which bank will take risk to provide credit lines to insolvent and overleveraged banks as not a single penny of LTRO money was provided to the corporations and who else will provide this money, I mean through which source ?
However, next week market will continue to focus developments in Europe and the Bullish rally is likely to extend with chances of occasional correction providing opportunity to make money on the bounce back.
Two major events of the week could ECB rate cut by 25 basis point on Thursday and US employment report.
Last Week - Monday June 25-29
-
Comment by Manish Patadia on July 1, 2012 at 6:30am -
hello u cant provide me with daily clue in gold mr asad
-
Comment by asad rizvi on July 1, 2012 at 7:45am
-
Manish - signals are available for the BLOG subscriber's only.
They all had excellent month of June.
if you are interested then you have to e-mail me on trendteller@gmail.com
-
Comment by Waheed on July 1, 2012 at 4:05pm
-
i sent application , why yet i am not added Sir
-
-
beacuse you have not shown you willingness to subscribe the blog
-
Comment by Waheed on July 1, 2012 at 4:41pm
-
Should i comes to karachi and talk with you(sir) physically
how i can assure you , i am serious about it
-
Comment by matahari muda on July 2, 2012 at 10:09am
-
Pls add my email sir to your blog
-
-
TUESDAY - July 03......
GMT 14: 49 - Euro @ 1.2605 I would wait, watch the rally and prefer around 1.2625-35 area
GMT 13:56 - GOLD @ $ 1619.25 = This rally should exhaust around $ 1623-25
GMT 09:00 - GOLD = Bias for gold is on the upside and is likey to hold around $ 1604 unless break $ 1598 for 4 1612 possibly $ 1618
GMT 08:42 - GBP @ 1.5688= Buy Cable around 1.5682-88 S/L 1.5660, break of 1.5715 will encourage for 1.5740
GMT 08:14 - GBP = Take profit around 1.5675-80
GMT 07:53 - GOLD = Break of $ 1612 could see test $ 1618-19, unless falls below $ 1602
GMT 07:35 - EURO @ $ 1.2578 = OK, if you went short around suggested leevl of around 1.2515, book your profit between 1.2572-78 and wait for next signal
.
GMT 06:15 - GOLD @ $ 1612 is next level that should hold. On the down side break of $ 1601-2 is required for a test of $ 1597-98 levels
GMT 01:43 - AUD 1.0266 - Potentially AUD may hit 1.0335-40 zones if holds above 1.0225
GMT 01:31 - GBP 1.5690 = 1.5660-70 should hold for a test of 1.5720-25, STOPS 1.5635
GMT 01:21 - Euro @ 1.2585 = In Asia Euro may find top around 1.2610-20, but unlikely to fall below 1.2555
GMT 01:12 - GOLD @ $ 1596.90 = Sell around $ 1597-99 STOPS if $ 1602 breaks for $ 1592-93
-
-
Wednesday, July 4......
GMT 13:56 = GBP @ 1.5606 = I would prefer buying around 1.5590-00 with STOPS 1.5550 and would not mind carrying overnight position. My profit taking overnight oder would be around 1.5670-75
GMT - 09:15 = Gold @ $ 1618.80 = Suggest please book your profit and Sell around $ 1621-22
GMT 0:48 =GBP @ 1.5657= Allow more fall, as potentially GBP could dip to around 1.5625-30, so prefer waiting a bit before buying Cable
GMT 07:44 = AUD is likly to hold above 1.0220 levels as long as Euro finds protection around 1.2520-40. We have seen the days top in the early hours of the day and any upmove will find top around 1.0310
GMT 01:26 -GOLD @ $ 1616.50 = Last night we may have seen the last leg of this rally completing around $ 1625. Today Gold may find support around $ 1610-12 zones for possibly another test of $ 1621-23 zones and only break could risk for $ 1627. On the down side it needs to fall below $ 1606 more losses.
-
Comment by Waheed on July 4, 2012 at 4:18pm
-
i agree with your words , GU have now tendency to moves upswards
i am very curious to know how you analyze the market
-
Comment by Manish Patadia on July 4, 2012 at 6:40pm
-
hello sir how could i become ure subscribe plze reply
© 2013 Created by FXstreet.
You need to be a member of FXstreet.com Forex Social Network to add comments!
Join FXstreet.com Forex Social Network