EurO & GoLD tO ProbE thE ToP – apRiL 13


So far it’s been an exciting week as all 12-FED voting members spoke on different occasions and spoke their heart out about monetary policy. Though Fed Vice Chairman Janet Yellen had a dovish approach like Fed Chairman Ban Bernanke, but the remaining members were Hawkish in their approach.

Interestingly, my observation is that they all were talking on the same wave length supporting lose monetary policy. They are of view that reducing unemployment is their top priority, if job condition deteriorates and inflation is manageable then accommodation will be recommended or added and if US economy continues to prosper and inflation becomes a monster they may have to go reverse their action. The message is clear that they will not act in haste. Fed voters will be keenly watching future data’s before deciding their next line of action.   

China’s Q1 GDP data is out and 8.1 pct growth is quite disappointing versus 8.9 pct last quarter growth that confirms slow export growth and low domestic demand making case for easing. But in another development, a report was released yesterday by PBoC, which stated  that Chinese bank lending in March jumped to Yuan 1.01 trillion ($ 160 billion) up by Yuan 332 billion, which could mean no easing and no rate cut at least in near term.

US Dollar that fell yesterday on no negative news emerging from Europe was pushed further down on mixed US economic data, as US jobless claim rose to 380.000, but narrowing of trade deficit was surprising.

Today, market should start discussing China’s slow growth, which is considered a major driving force for the global economy. If we combine the two and discuss/compare US economic growth and China’s fall, China’s slowdown is bad for Australian and European economy. This is surely positive news for US Dollar.


Gold @ $ 1674.80 = Gold may have topped for the moment and suggest selling around $ 1677-78 with STOP LOSS $ 1682. A drop below $ 1770 will encourage for $ 1667 and break of this level would confirm fall towards $ 1660. However, on the upside break $ 1688 will delay the down move.

Euro @= 1.3170= Although we may have seen Euro’s top, but I will allow another run up towards 1.3215 only on break of 1.3190-95 zone, which may not be easy to crack. I am looking for dip to 1.3140 and break below 1.3135 would encourage for 1.3105. However, break of 1.3240 will delay the down move.

GBP @ = 1.5940 = Cable should struggle to move beyond 1.5965-70, any up move should fizzle out around 1.5985’s. A break of 1.5930 would encourage for a test of 1.5910 or probably 1.5880.


US DollaR tO EaSe – GoLD to GaiN – ApR 12

Views: 2812

Comment by naivetrader1 on April 13, 2012 at 4:55am

Considering the +ve correlation between USD pairs & Equities & China GDP (8.1) do u think the rally of last 3 days would roll back, today?

Comment by Omer Mukhtar on April 13, 2012 at 6:03am

Sir, no surprises in the German CPI numbers, how do you see the markets reacting to it?  EURUSD pretty stable right now, has been since 3 hours.

Comment by asad rizvi on April 13, 2012 at 6:29am

naivetrader1,to me these are all economic gimmicks and adjustments made as and when suited. Market look for reasons weather it makes sense or not.

Oil in 2008 was $ 30 and when it reached $ 40 there was inflation threat. Today oil is over $ 100 inflation is not a big threat.

GOLD about a decade ago was $ 440 but at $ 500 was inflation threat. Today Gold is at $ 1674 but inflation is manageable, since in developed countries minus UK, it is between 2-3 pct and is no major threat.

Trillions are being printed but there is no threat of inflation.

My working is not based on reality and therefore, my view remains unchanged. I do not believe in such economic gimmicks as their job is to create Bullish environment because in Bear market economist/analyst will never survive. E.g, if global GDP from $ 71 trillion reaches $ 21 trillion due to deficit adjustments, World financial market will collapse.

Finally, we have reached a point that from here onwards world financial managers will continue to make accounting adjustment that can only save the world financial world as long as it is workable.

Because the solution to the problem is increase revenue and cut spending. Increase in revenue collection is only possible by raising taxes and increase in exports. No government has the guts to raise taxes fearing loosing election............So be prepared for requent trouble and frequent financial misery....Cheers

Comment by naivetrader1 on April 13, 2012 at 6:34am

That was excellent! Thanks a lot.

Comment by asad rizvi on April 13, 2012 at 6:35am

Omer, trading in EURO is very simple as I have explained many times that after 100 pip upward rally sell Euro because you will hardly make any loss even if there is another 50 point upside rally because European problem is so huge that every next day you will come across a problem. E.g., Euro went up to test 1.3210 and now down 50 pips. So don't worry, simply try to pick the right level...However, my view remains unchanged.....GL


Comment by spring on April 13, 2012 at 6:46am

Thanks ,sir

My pengding orders  (sell limt EURO  @ 1 .3190----92 ---96 --98---1.3204 )  are all activated.

MY pending orders  (sell limit GOLD @  1672---75--78--79)  are all activated.

Thank God!    All my AUD orders (sell @  1.0389 --1.0411--1.0427)  take profit @ 1.0390 after China’s Q1 GDP data .

Is  the potential for a deep market correction  coming over the next few months?  S&p500?

Thank you.

Comment by asad rizvi on April 13, 2012 at 6:46am

Jason, my view unchanged. I do post when I feel necessary...Cheers

Comment by asad rizvi on April 13, 2012 at 6:52am

spring, then I am sure you are the richest person in this forum ;-)

Comment by spring on April 13, 2012 at 7:05am

Knowledge is power. - - Bacon

Knowledge is wealth.

 I am sure you are the richest person in this forum-----you are my teacher for ever.


Comment by Vinod Perkash on April 13, 2012 at 7:33am

sir rizvi as china GDP is not good today where you see AUD today!! wht is the good point to sell!!


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