FatE of FuturE FinanciaL MarkeT is in MoneY PrintinG

When Europe started to look a done deal after settling all major issues, paving way for Greece bailout package that increased hope to bring stability in Europe, it was FED’s Tuesday  FOMC release that had unsettled the market.

Despite Bernanke’s dovish stance on US Interest Rates that he sees no change until 2014, Tuesday’s FOMC hinting that there are some inflationary pressure due to rising oil, but happy with economic recovery and improved US job market condition and not mentioning of QE3, Gold and Bond market reacted sharply. And keep in mind that Oliver twist is due in due in June 2012.

It was Tuesday’s FED easy approach towards US economy that rattled the US bond market, as hopes for QE3 diminished when not a single word was uttered about quantitative easing. 30-year US Bond took the lead by extending losses spilling into 3 years, 5 years and 10- year’s bond respectively.

With a bullish view, 30-year bond market has been almost stable for the past 30-years. Though I do not have the figures to tell you the size of 30-year bond, but since it had impacted the overall bond market, FYI, imagine that the total size of Major Foreign Holding of US Treasuries jumped from USD 4.436 Trillion in Dec 2010 to USD 5 Trillion in December 2011.

If the sentiments start building up that US interest rates will rise sooner than Mr. Bernanke thinks then this will have bigger impact upsetting many areas, as US Dollar provides carry trade opportunity to traders/investors will surly deprive them of this money making facility.

It’s a major development that despite improved market condition in Europe, US Dollar is dominating and US Treasuries and Gold is taking the beating. If the sentiment continues to prolong the trend may last, USD will gain, bond and gold to suffer. So keep an eye on rising oil price and inflation numbers and US Bonds for more clues.

The current situation provides one very important clue that the fate of future financial market will be totally depended on Money Printing (QE), which is nothing different than cortisone injection and therefore, without note printing the global market could collapse.

 

GOLD $ 1647.60 = Gold could still find top around $ 16655-60 zones for another test of $ 1634. Needs to make a clear break of $ 1680 to ease bearish sentiment

 

EURO @ 1.3030 = On the upside only break of 1.3060 will encourage for a test of 1.3090 that could pave way for 1.3140 another key resistance level. Risk is that EURO may not have enough legs to push much beyond and suffer losses to test 1.2980

 

GBP @ 1.5650 = Prefer buying around 1.5640 with Stops if 1.5610 surrenders for 1.5690 or 1.5725

 

March 14 - GoLD tO RemaiN WeaK – BuY EurO & GbP oN DipS

http://www.forexstreet.net/profiles/blogs/gold-to-remain-weak-buy-e...

 

 

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

Comment by Madeen on March 15, 2012 at 6:45am
Sir can we go long on cable here at 5660
Comment by asad rizvi on March 15, 2012 at 6:52am

Yes, with stops 1.5625 

Comment by Madeen on March 15, 2012 at 6:59am
Thanks! In long
Comment by Gordon Gekko on March 15, 2012 at 7:30am

Dear Mr. Risvi,

 

Gold stuck @ 1647, will we see an upward momentum then a pull back?

What are you buy and sell entry levels at this time or in the distant future?

 

Thank you.

Comment by asad rizvi on March 15, 2012 at 8:30am

GOLD @ 1648 = For the moment should hold around $ 1644 for a test of $ 1652-54 zones

Comment by Gordon Gekko on March 15, 2012 at 3:16pm

Dear Mr. Risvi,

 

It's looking like the markets are choppy, do you see Gold today test 1635 and Euro test 1.3000?

 

Thank you always for your prompt and appreciated replies.

 

BR,

Comment by asad rizvi on March 15, 2012 at 3:40pm

GOLD $ 1647.30 = I am still looking for attest of $ 1654

 

EURO @ 1.3075 = I will stick to my earlier view that unless breaks 1.3090 Euro will remain depressed and this break of 1.3020 will see a push below 1.30. However upside break should exhaust around 1.3125

Comment by Muhammad Taseen Khan on March 15, 2012 at 3:55pm

Dear Mr Rizvi,

Euro=At current level shorting Euro around 1.3085 is riskier and should we wait and short around 1.3125 ?

Thanks

 

Comment by Gordon Gekko on March 15, 2012 at 4:01pm

Thank you Mr. Risvi. It seems the US Dollar is taking a breather despite very good economic results, the market went upwards instead of downwards, how can that be explained?

 

Best,

Z

Comment by asad rizvi on March 15, 2012 at 5:17pm

MrZaid, everyone is forgetting that there is some sort of stability back in Europe. US Treasuries too is on hold. So Gold did move…I have been indicating that in my write-ups…GL

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