Bernanke in his speech reiterated his earlier statement that there is no impeding end to loose monetary policy. It seems he has no plans to change his ongoing current strategy because he thinks that growth since last 3-years have been satisfactory. He may be right as unemployment fell to 8.3 pct, so he may not spoil all the hard work further suggesting that he is comfortable with low rate and QE.
In his recent speech my gut feeling is that FED Chairman is bit unsure about the current employment trend, which means that the pace of GDP could mildly slow down or may not pick up the desired level and unless growth pace in maintained job numbers cannot be improved.
Therefore, QE3 is live ammunition in his sleeves, which he may want to use only when he feels it is necessary to use and if he thinks that QE3 is of great value then he will certainly not be willing to risk the economy by shifting his lose monetary policy stance.
Coming quarterly growth numbers, payroll and growth in manufacturing sector will provide clearer picture of the economy. Bottom line is that FED Chairman’s message is clear that FED’s stance will remain soft.
Let’s wait and see what Mr. Bernanke has to say in his next appearance on Thursday.
Euro @= 1.3330 = As I have always been saying that if Euro surges 100 pips, then pick top to sell, because Euro does not have enough legs to make bigger strides as there is no big supportive factor to push Euro much beyond and yester this strategy once again proved to be correct.
Today Euro will continue to struggle and should exhaust around 1.3340-50. Unless it surges beyond 1.3380, test of new high will not be possible, looking for dip, needs to make a clear break of 1.3280 for 1.3265.
GBP @ = 1.5958 = Today, I would like to sell cable around 1.5980 with STOPS 1.6010. Break of 1.5805 risk for a test of 1.5860 or else 1.6060.
GOLD @ = $ 1680.50= My Gold target of $ 1698 was met comfortably. But failure to penetrate beyond gave good excuse to halt the ongoing rally and now is back in neutral zone.
Prefer selling around $ 1682-85 zones with Stops $ 1688 for a drop to $ 1672-74 area or else $ 1692.
Mar 27 - GoLD tO gain – GbP BuY oN DipS – EurO, PicK ToP/BottoM