GoLD tO gain – GbP BuY oN DipS – EurO, PicK ToP/BottoM

 

Good German IFO number failed to lift the traders/investors sentiment for Euro, as worry over Spain’s high deficit number and Italy’s deteriorating economic condition failed to give boost to the European currency. Market will be watching Spain’s Friday budget as its deficit is a worrisome factor. Market will also be watching Bond auction/price of Spain and Italy for more direction.

However, it was once again Bernanke’s speech that guided the market on belief that he will continue with his soft interest rate policy. He was targeting unemployment rate, as he said that he is not sure if improving job condition is sustainable and hence, wants faster growth rate to counter slowdown and improve job market. Fed Chairman clearly stated that he wants accommodative monetary policy to create jobs.

I think Bernanke does not want to take the risk, as he knows that global oil prices is not going to ease in near term due to ongoing geo political condition specially with reference to development in Gulf, which is not going to ease inflationary condition anytime soon and hence is trying to maintain a balance between inflation and growth as both are key to job market.

Therefore, to me Fed Chairman’s strategy is to combine both near term with long term goal in such a manner that growth can be achieved and unemployment can be reduced. Inflation is his near term concern as inflation could hinder growth that may impact job market in long term.

Hence, in such a situation, continuation of easy monetary policy could be the best statement that could offer to the market, which may not be the case in next six months time if oil prices rise by another $ 10-20.

Overall, development points to more US Dollar losses with chances of Euro hitting 1.3440-50 zones, but I am very uncomfortable buying Euro at current levels and hence, will adopt cautious approach. I prefer to sell currencies from top side of the range, as this could be a trap because USD from around 1.34 levels could make sharp gain.

.

Euro @= 1.3349 = Before European opening Euro could test 1.3335-40 before moving up and should hold 1.3305. Prefer waiting to Sell EURO around 1.3370-80 with Stops, if 1.3410 surrenders for 1.3325

GBP @ = 1.5960 = There is a small risk that Cable could fall and may test 1.5935-30 zones before making another test of 1.5970-70 before European opening.  If 1.5940 breaks, Cable may test 1.59’s, I would prefer waiting to buy around a.5910 that may happen European time zone, before making up move, but needs to break 1.5990-95 which is tough for 1.6045. Apply Stop is 1.5870 surrenders.

GOLD @ =  $ 1686.50 = Buying on dips is the preferred strategy of the day around $ 1683-85. Watch $ 1678 should stay above for $ 1694 or $ 1698

 

GoLD tO GaiN, EurO RallY tO FizzLE OuT - Mar 26-30

http://www.forexstreet.net/profiles/blogs/gold-to-gain-euro-rally-t...

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Comment by Gordon Gekko on March 27, 2012 at 3:38am

Thank you.

Comment by spring on March 27, 2012 at 3:40am

sir , I believe that the Euro will drop to 1.2 this year.

 so "I prefer to sell currencies from top side of the range, as this could be a trap ."

Comment by asad rizvi on March 27, 2012 at 3:49am

Spring, no, I am saying that I not comfortable selling Euro around 1.3380-00, although it has the ability that it could reach 1.3440-50 area. 

My fear is that there are so many problems in Europe that with one bad news EURO could take a big dip.

Now suppose if you sell Euro say around 1.3390 for 1.3430 and if it dips and breaks 1.3270 you can get stuck with your position unless you apply loss.

EURO bulls may not agree with my reasoning, but keep in mind that this is my personal view….GL  

Comment by spring on March 27, 2012 at 4:04am

thank you  very much ,sir

 

I know   "First You Manage Risk, Then You Manage Reward "

 

thanks

Comment by asad rizvi on March 27, 2012 at 8:03am

GBP @ 1.5972 = Saw a perfect fall but held 1.5840 well and bounced back nicely, this rally can extend up to 1.5990-95....More Later

EURO @ 1.3346 = Did drop as per call now look good to test my target1.3370-75

Comment by Gordon Gekko on March 27, 2012 at 8:05am

Mr. Risvi - Are we seeing Gold higher now @ 1692 testing the 1700s?

Comment by asad rizvi on March 27, 2012 at 8:10am

Yes, may pause around $ 1694-95 before the up move

Comment by asad rizvi on March 27, 2012 at 9:06am

Gool Luck..;-)

Comment by Aditya on March 27, 2012 at 9:11am

Mr Rizvi...EURO @ 1.3380..time to book profit or some legs left in the rally ?

Comment by spring on March 27, 2012 at 9:11am

yes, euro is  testing  1.3370-80

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