EurO tO CoMe UndeR PresSurE – SelL GoLD - Apr 19

Since last week, news from Europe and Spain continues to dominate the world financial market. This week we saw successful biding of Spain’s short term bond, but today’s 10-year auction would further indicate investor’s confidence level in Spanish economy.

Spain’s latest doubtful bank loan figures added more to country’s economic gloom, since February’s number suggest that the ratio of bad loans jumped to 18-years high to Euro 143.8 billion to 8.15 pct of the total credit versus from 7.91 pct in January.

I am not sure how many of you took note of my yesterday’s post, I had highlighted that UK’s MPC meeting minutes could be the main driver behind Pound Sterling’s move, which roar passed the 1.60 figure.

Helped by better employment data, Pound got further boost when dovish Adam Posen did not demand for an increase in the size of QE, which is currently GBP 325 billion.

Today’s US Economic data could give last push to Euro to slide below 1.30 levels, as market should be nervous after French Socialist challenger Hollande’s statement that he will protect sovereignty and re-negotiate German led fiscal pact. Survey suggests that the Socialist challenger is constantly leading by over 7 pct. Spain’s 10-year bond auction will be today’s trend setter. One thing is for sure that there is plenty in Europe to worry about.

Gold @ $ 1641 = Selling strategy to continue around $ 1642-44, as Gold should stay below $ 1649 for $ 1633-35 levels as my new target is $ 1626. However, only break of $ 1652 could delay the down move

Euro @= 1.3122= Sell Euro around 1.3135-40, a break of 1.3080 is required for a test of 1.3040. A break of this level would pave way for 1.2950. However, only break above 1.3180 could risk for minor gain.

GBP @ = 1.6032= There is a minor risk that break of 1.6045 could push Cable towards 1.6070. However, once 1.5975 surrenders Pound would ease and should test 1.5840.

DuLL TradinG DaY AheaD – SeLL GolD oN RisE - ApR 18

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Comment by Jason on April 19, 2012 at 4:43am: Hi everyone

Thought I saw someone asking earlier.

The Spanish bond auction is supposedly to take place around 0840 GMT.

Hope this helps.

Comment by Farhan Yunus on April 19, 2012 at 5:04am: USDCHF:

Given the correlation to the EURUSD and tomorrow morning’s (430 am EST) Spanish auction, don’t dismiss the potential for a test of 9090 before the next bull leg.

EURUSD:

EURUSD Trade Idea on Spanish Auction - http://t.co/4QuQcwhQ

A test of 12880-12900 is favored as long as price is below the April high of 13379. 12880-12900 intersects channel support late this week. Watch the level closely as a drop below the channel would be a ‘tell’ that the decline from 13379 is a 3rd wave rather than a C wave. On the other hand, a rebound from that level (or spike below and recovery) would favor a C wave interpretation. A test of 13210/50 may take place before the next bear wave but I believe that being short is the correct position. The ideal short entry would be on a positive reaction to the Spanish auction into 13210/50.

Comment by prem on April 19, 2012 at 6:42am: Sir

GBP can be sold around 1.60389 and EUR sell around 1.31191

Comment by Peter jcp on April 19, 2012 at 6:42am: Some analysis put out by many traders or sites "baffle me" - ie as above link with a favor of a C wave test up to 1.3210/50 and then sell off. This to me shows concern that the guru / trader / etc who is making the prediction is letting his EU "bias" overtake any trading view. 3210/50 is as of now 100 to 150 pips above the present price - but there is no mention of a buy to there - and then a sell ??

To me this shows the analysis is "flawed" and simply a "guess" - if you cannot get it correct within 150 pips on an intraday basis - why are they bothering - they should not be advising others. Instead the analysis should be more "micro managed" in its approach - ie - if the Eu today makes an high above 3136 - it would then need to clear 3150 and 3175 to even test 3200 etc . So therefore instead of waiting to see if the Eu does rise 100 -150 pips before the recommended sell - you can either short term buy with stops based on each resistance level broken - knowing if then the next point is not broken you can then look at sells. Futhermore if we dont make over 3136 and 50 resistance levels - then we might be falling straight away and then tests of under 3100 and 3060 should be looked at. Each time a test fails at a major S & R level is a reason to look at retraces and opposite directions. When you then "drill" down you can start to manage trades without any 70-150 stops ( I work on 5-10 pips) but to me if as a trader you cannot work under 30-50 pips max - you should not be intraday trading- but instead advising only in a bigger picture - and to me that is not really trading - more investment ideas etc.

In conclusion when ever you see analysis which is basically as good as "tossing a coin" without real detail - ignore it if you are an intraday session trader - instead learn to read the charts properly - and remember not just on 4 hr and daily charts- they are only part of the jigsaw. Have a good day and start learning more for your future trading decisions- its take time - but I promise you it is all readable.

Comment by spring on April 19, 2012 at 7:12am: "When everybody goes to the same side of the boat, it's logical to take the opposite side of the trade." -

WoW ! !

Comment by asad rizvi on April 19, 2012 at 7:18am: Mohamad, I did like your idea of expanding business model and to include financial service. Today 1^st thing that I did in my office is that I have started working on this project

Millions of traders all over the world are too dependent on chart working because the trader is totally dependent on the program that is available on a 20 inch computer screen that was sold to provide guidance about the next ticker and therefore those millions that have bought the system in a hope all those million will act together that may produce the desired result.

All traders are always looking at the tickers in hope to tell about the next move because of their inability to understand the fundamentals. When an economic even happens, they all look at their computer screens to get some guidance.

When a system makes an error like it happened in NYSE in 2008, all those poor traders had to suffer huge losses because they were totally dependent on electronic trading system and hand no idea about the real world.

I agree that the world is now too dependent on electronic machines and hostage to computer programming.

Another good example is printing of money, which is no more printed or would not be wrong to say humanly not possibly and thus electronically managed.

I am sure scientists and engineers must be working to replace such traders with robots.

Enjoy ! It’s all about perception ;-)

Comment by Marlis Spatzier on April 19, 2012 at 7:37am: Good morning Mr. Rizvi, do you have more information about your poject.

Thanks a lot

Marlis