EurO & GoLD tO GaiN BeforE FallinG - ApR 23-27

As market sentiment throughout the week remained bearish for the European region, but lack of positive data from USA did not allow US Dollar to make further gains.

Late weakened news of IMF announcing increase in its commitment to new funding to USD 430 billion against market expectation of USD 400 billion for the Euro-zones that will increase the regions risk taking ability was cheered by the market. This does not include BRICs money, so the IMF backed firewall could add another USD 50 to USD 75 billion by June 2012. 

The big question is that how will this increase help Europe or what difference the increase in IMF amount will make because the quantum of damage to the European economy is so huge that despite LTRO amount of Euro 1 Trillion (lending at nearly 1%) the latest Spain’s doubtful or bad bank loan figure since February, jumped to 18-years high to Euro 143.8 billion or (USD 190 Billion)   

Although news from Europe is likely to dominate the world financial market, as initial reports are suggesting that Sarkozy and ruling Greece party could struggle to survive, which is bad news for Euro.

But this week’s two-day Federal Open Market Committee (FOMC) meeting to be followed by Fed Chairman’s speech is the major event of the week. It is once again the Fed’s language that will matter the most, as last couple of week’s soft US data has raised few hopes of liquidity injection through bond buying, which is weak case.

On Monday, there are couples of European data’s, which may not matter a lot, but Tuesday’s US new home sales could bring some excitement, which will indicate housing market trend as it also help in determining the strength of consumer related sales such as furniture and home appliances.

Wednesday is the most important day of the week, as UK will be releasing its GDP data and since recent release of UK figures have shown signs of improvement and hence, reducing the chance of quantitative easing, better economic number would further confirm that Britain has avoided recession. However, disappointing data could see correction of GBP against all currencies.

But after the release of UK data market focus will soon shift towards USA for the notorious durable goods data, which will be followed by Fed’s decision on interest rate, which is currently 2.5 pct.

On Thursday, there is no major data, but market could react on FED’s monetary policy statement that may keep global financial market on its toes and on Friday, there are couples of German data, which may not be enough to create volatility, as market will be looking for some bigger news or excuse to act.

    

GOLD @ $ 1644 : Gold could not benefit despite end of protest in India by the gold traders and beginning of the Indian wedding season as buying is far below expectation. Initially gold could make some gains in anticipation of next week’s Indian festival and some may be buying in a hope of further QE due to disappointing US data last week. But I still believe that gold’s up move will be short lived due to lack on investors interest and sellers will continue to clobber the yellow metal in US session.

I will not be surprised to see a break of $ 1655 for a test of $ 1662, but gold needs to break above $ 1668 for more gains. However, on the downside a break of $ 1637 increases the risk for a rest of $ 1628. Before the close of week if Gold makes a New York close of $ 1625, we could see a test and break $ 1600 levels.   

 EURO @ 1.3205 =  Euro will initially make minor gains, but has any strong resistance at 1.3298. European currency should be capped below 1.3275 and once 1.3120 surrenders, Euro should dip below 1.3080. Break of 1.3350 could be threatening.  Ranges for the week 1.2940 – 1.3350   

GBP @ 1.6113 = Basically GBP will continue to have strong tone, but major resistance is at 1.6190 and if breaks could see a surge towards 1.6255. Only break below 1.6040 threatens for more loses probably 1.5940. Ranges for the week 1.5940 - 1.6260    

 YEN @ 81.39 =  The level to watch 81.90-95 where the Japanese currency has strong support and I do not expect this level to surrender with ease. But a push below 80.80 would encourage for 80.10 and break of this level should see a test of 79.60. However, if support level surrenders Yen could weaken to test 82.98. Ranges for the week 79.60 – 82.50    

CHF @ 0.9082 = Swiss Franc’s strength may be a worrying factor for the SNB, but market will continue to test the nerves of Swiss Central Bank. However, I am expecting 0.9020 to hold and 0.9040-50 will be hard to crack. A move beyond 0.9195 could weaken SFR to test 0.9160 possibly 0.9190. Ranges for the week 0.9010 – 0.9220.

 

UsD uP - GoLD DowN ApR 16-20

http://www.forexstreet.net/profiles/blogs/usd-bias-up-gold-down

 

 

Views: 7569

Tags: http://asadcmka.blogspot.com/

Comment by asad rizvi on April 23, 2012 at 5:28am

Ceasar AUD @ 1.0341, today’s bad PPI data, which is lower than expectation strengthen the case of Australian rate cut and tomorrow’s CPI will be keenly watched for more direction. China’s PMI 49.2 pct is better than last month’s number, but number below 50 pct suggests weak growth and Australian economy has the liking for good Chinese growth.

Now, as I am expecting Euro to come under renewed pressure in Europe that will should keep the Australian currency soft. AUD should find resistance around 1.0360-65, but unlike=y to fall below 1.0310 unless Euro is clobbered, because Australian Dollar is one of the investors favourite currency that offer good return doe to high interest rate.

I my view even after 0.50 basis point cut investors will rush to buy Aussies, as it would still be offering good return.

Comment by ceasar on April 23, 2012 at 5:58am

Thank you for your feedback...cheers

Comment by Roger Pazdera on April 23, 2012 at 6:03am

Good morning mr Asad,

Gold is currently @1640. I think its a BUY with TP at 1650 and  SL 1635. Would appreciate your opinion. Thank you

Comment by asad rizvi on April 23, 2012 at 6:15am

Roger Gold @ $ 1641 = Developments in Europe iis not very encouraging. Henec I would wait to sell around $ 16445 with STOPS if $ 1650 surrenders, as break of $ 1637 will push it down by another $ 3-4...GL 

Comment by Roger Pazdera on April 23, 2012 at 6:20am

Thank you for your point of view

Comment by spring on April 23, 2012 at 7:31am

EURO-----------> "it has to clear 1.3170 for next down move to 1.3130-40"

Comment by asad rizvi on April 23, 2012 at 7:43am

Spring.....1.3137 TESTED... did you see what I see and do you see what I see !!

Comment by Roger Pazdera on April 23, 2012 at 7:49am

Some very strong player started to sell gold about 15 min ago and created mass hysteria. Hope it will continue to 1625-20 to have a nice buy opportunity

Comment by spring on April 23, 2012 at 7:51am

Oh ,no!  Si r

It's a pity I missed the opportunity to sell euro.

I had 2 day's travel by train.

Comment by sowMa on April 23, 2012 at 7:51am

Hello Sir what about GBP what do you see on this pair thank you /

Comment

You need to be a member of Forex Social Network to add comments!

Join Forex Social Network

Members

© 2014   Created by FXStreet.

Badges  |  Report an Issue  |  Terms of Service

Offline

Live Video