Technical Forecasts

The pair is trading along an sideways trading pattern.
An downtrend will start as soon, as the pair drops below support level 1427, which will be followed by moving down to support level 1418 and if it keeps on moving down below that level, we may expect the pair to reach support level 1405.An uptrend will start as soon, as the pair rises above resistance level 1451, which will be followed by moving up to resistance level 1470.
Supports: 1427, 1418, 1405
Resistances: 1442, 1451, 1470





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The pair is trading along an sideways trading pattern.
An uptrend will start as soon, as the pair rises above resistance level 1442, which will be followed by moving up to resistance level 1451 and if it keeps on moving up above that level, we may expect the pair to reach resistance level 1470.An downtrend will start as soon, as the pair drops below support level 1433, which will be followed by moving down to support level 1418.
Supports: 1433, 1418
Resistances: 1442, 1451, 1470





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The pair is trading along an downtrend.
The downtrend may be expected to continue while pair is trading below resistance level 1.5345, which will be followed by reaching support level 1.5235 and then 1.5150.An uptrend will start as soon, as the pair rises above resistance level 1.5345, which will be followed by moving up to resistance level 1.5400 and if it keeps on moving up above that level, we may expect the pair to reach resistancet level 1.5480.
Supports: 1.5235, 1.5150
Resistances: 1.5345, 1.5400, 1.5480





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The pair is trading along an downtrend.
The downtrend may be expected to continue in case the market drops below support level 1.2970, which will be followed by reaching support level 1.2930 and then 1.2800.An uptrend will start as soon, as the pair rises above resistance level 1.3030, which will be followed by moving up to resistance level 1.1.3115.
Supports: 1.2970, 1.2930, 1.2850, 1.2800
Resistances: 1.3030, 1.3115





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Bullion Round Up

Gold started the week with a sell-off from last Friday’s close at $ 1448 and settled to a low of $ 1426 during European trading hours. Further weakness in the gold market remains after it broke below the $ 1440 support level. The breakout of its previous trading range of $ 1440 - $ 1480 and failure to overcome resistance at $ 1488 potentially indicate a new downtrend. “The sharp rebound in the yellow metal from two weeks ago was not sustainable due to the on-going capital shifts into equities” – said Gerry Schubert, Head of Precious Metals at Universal Bank Emirates NBD in Dubai. Bloomberg report confirms in their latest article that “Hedge Funds continue to increase their bets on lower gold prices after investors pulled a record $ 20.8 billion from bullion funds this year”. Total holdings of gold in Exchange Traded Products fell by 34.3 tonnes last week, according to data compiled by Bloomberg.

Hedge Funds and retail investors are fleeing the gold funds in search of better yield in equities.
Physical demand continues to be the main support but many analysts think that it is a one off event. Physical buyers could stay on the side line for now as prices have risen from the low of $ 1325 to $ 1488 and some may deem it too expensive. A stronger US dollars and continuous outflow from ETFs could be the beginning of a downtrend as the rebound from previous low come to a standstill. Gold prices remain in a bearish mode as continuous outflow of ETFs funds hurt sentiment. In addition, gold prices remain sensitive towards the Federal Reserve decision on their QE programme. Article by WSJ Jon Hilsenrath indicate that Fed members are mapping out an “exit strategy” but unable to decide on the timing. CFTC reports also indicate a bearish picture as speculators are increasing their short positions – betting on a lower gold price.

This week focus on economic data is the German Zew economic sentiment, EU industrial production, German GDP, UK claimant count change; BOE inflation reports, US Jobless claims and core CPI numbers which could be of great interest.

Gold Technical

Gold started off with selling pressure in early Asia trading hours. Prices found support at a low of $ 1426 before trading in between $ 1439 and $ 1436 level. A break below $ 1424 which is the 38.2% retracement line from the low will give the bears more reasons to short the market. However, should it hold and rebound then there is a scope for gold to retake $ 1440 area once again which was the previous support. Technically, it remains weak and biased to more downside pressure as the daily chart shows a falling stochastic and the MACD line which is about to cross lower (trading in the negative zone). The RSI seems to indicate that gold has room to retest last week low at $ 1418 and should that break then $ 1404.
Resistance: $ 1475, $1488, $ 1496, $ 1525 Support: $ 1418, $ 1404, $ 1325

Bearish – target $ 1400

Bullish – target $ 1600

Silver Technical

During the early Asian trading hours, silver prices whipsawed in a thin market as prices tried to find some grounds between $ 23.83 and $ 23.50 area. Silver managed to reclaim higher despite a stronger US dollars and better than expected US Retail sales data. Silver continue to consolidate in the descending triangle formation. A break below $ 23.15 will set off another round of selling spree that could take it back to revisit previous low at $ 22.00. In the short term, a break above $ 24.20 will be favourable for the bull as silver will trade outside of this formation and possibly test higher prices at either $ 25.03 (50% retracement) or $ 25.75 (61.8% retracement). The rebound rally lost its steam and silver has not really performed as well as gold.
Technically, the daily chart shows a Bollinger band that is coming closer to a breakout. At the moment, the risk for further correction remains high.
Resistance: $ 24.82, $ 24.91, $ 25.59 Support: $ 23.19, $ 22.88, $ 19.00

Bearish – break below $ 23.15 could see a retest of $ 22.00

Bearish – a retest of $ 22 is possible and could go lower to $ 21.00 or $ 19.00

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SPOT GOLD

SPOT GOLD closed @ 14305 which was BELOW the open and was within prior day's trading range. The High was 1.5 Dollars from Precise Trader's Res Zone 1 and the Low was 2 Dollars from Precise Trader's Sup Zone 5 (U Turn Zone).
The Hourly Oscillators are Bullish but Weak and the Price is Within the MA, so CAUTIOUS approach is needed for the Bulls. Hourly Trend is Sideways while 14455 holds and Daily Trend is Limited Down while 15280 holds, so expect the price to be Choppy until Breakout.
The Daily Closed < S5 ,it still within range on a Daily and 15910/16100 are the Bearish Violation Zone . The Patterns are suggesting a Range until the breakout. The 15min is within a range until the breakout . The Bearish Violation Zone is 14600-14725 levels and the PT Anchor Low/ High is 14290-14350 levels.
BULLS:**** 14320*** *14260*** *14180
BEARS:*** *14455*** *14530**** 14600
Today's Strategies:**** LONG near 14320 14260 with a tight stop and 6-8 pts price targets.

NZDUSD

NZDUSD closed @ 8250 which was BELOW the open and breached the previous day's low. The High was 5 pips from Precise Trader's Res Zone 1 and the Low was 25 pips from Precise Trader's Sup Zone 2.
The Hourly Oscillators are Turning Bullish and the Price is Within the MA, so the Bears have to be CAUTIOUS. Hourly Trend is Sideways while 8365 holds and Daily Trend is Sideways Down while 8485 holds, so expect the price to be Choppy until Breakout.

Summary USDCHF closed @ 9575 which was ABOVE the open and was within prior day's trading range. The High was PRECISELY at Precise Trader's Res Zone 1 and the Low was 5 pips from Precise Trader's Sup Zone 2.
The Hourly Oscillators are Bearish but Weak and the Price is Within the MA, so CAUTIOUS approach is needed for the Bears. Hourly Trend is Sideways while 9455 holds and Daily Trend is Sideways Up while 9330 holds, so expect the Price to be Choppy until the Breakout.
The Daily Closed > Open ,it was within a Range with an upside bias and the Bullish Violation Zone is 9415-9330 levels. The Patterns are suggesting a range but the downside may be limited . The 15min is creeping lower but may be limited . The Bearish Violation Zone is 9545-95 levels and the PT Anchor Low/ High is 9545-95 levels.
BULLS:*** *9500*** *9475*** *9435 *
BEARS:** **9545*** *9595*** *9635
Today's Strategies LONG near 9500 9475 with a tight stop with a 35-50 pips price target.

AUDUSD

AUDUSD closed @ 9955 which was BELOW the open and breached the previous day's low. The High was 30 pips from Precise Trader's Res Zone 1 and the Low was 10 pips from Precise Trader's Sup Zone 4.
The Hourly Oscillators are Turning Bullish and the Price is Below the MA, so the Bears have to be CAUTIOUS. Hourly Trend is Sideways while 10080 holds and Daily Trend is Turning Up while 10370 holds, so expect the Price to be Choppy until the Breakout.
The Daily Closed < S2 ,it is creeping lower but we may get a correction and 10265-10340 are the Bearish Violation Zone . The Patterns are suggesting a pullback higher may be limited . The 15min is in a Range and upside may be limited . The Bullish Violation Zone is 9940-70 levels and the PT Anchor Low/ High is 9940-70 levels.
BULLS & BEARS : Get the full report by visiting Precise Trader for a Free Trial.

USDCAD

USDCAD closed @ 10105 which was ABOVE the open and was within prior day's trading range. The High was PRECISELY at Precise Trader's Res Zone 1 and the Low was 5 pips from Precise Trader's Sup Zone 1.
The Hourly Oscillators are Bearish but Weak and the Price is Within the MA, so CAUTIOUS approach is needed for the Bears. Hourly Trend is Sideways while 9980 holds and Daily Trend is also Sideways while 10235 holds, so expect the Price to be Choppy until the Breakout.
The Daily Closed > Open , is creeping higher and looks like it may have bottomed and 10225-80 are the Bearish Violation Zone . The Patterns are suggesting a range with a limited downside . The 15min is in a Range but the low may have been seen. The Bullish Violation Zone is 10015-45 levels and the PT Anchor Low/ High is 10075-10115 levels.


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Bullion Round Up

“If you are not in the dollar trade, you are missing out big time” so said a currency trader. The current sentiment favours buying the US dollar index and shorting currencies that are against the dollar such as the weakness we are witnessing in JPY and AUD. Commodities also suffer and faced headwinds as the latest talks by Fed officials on tapering the QE help to favour a stronger dollar. In addition, the better than expected economic data such as a lower jobless claim and better than expected retail sales number have improve economic sentiment. The US dollar continue to strengthen against many other major currencies that either have just started to cut interest rate or embark on quantitative easing. There were concern among economic leaders during the G7 summit about currency wars but there were no strong opposition. Therefore, low interest rate and quantitative easing will continue as the main tools to help the ailing global economy.

Global easing continues and the US stock markets propelled higher, carving out new all-time high ever since the beginning of 2013. The old adage of “sell in May and go away” continues to be questioned given the large amount of central bank hot money pumping into the system. Fed Chairman Mr Bernanke sees no asset bubble and deems the current strength in equities as the return of market confidence. Critics argued that companies are reporting lower revenue growth and the current rally is inflated from the liquidity provided by central banks. Some are worried that the market is promoting investors to take more risk and there was real concern that we are running back to the old financial style that crashed the global economy back in 2008.

Meanwhile, the Eurozone’s economy contracted for the sixth straight quarter and marked its longest recession on records dating back to 1995 – Reuters. The lack of economic growth is, huge debt and high unemployment continue to drag the Eurozone into deeper problems. As recession starts to bite in, austerity programmes may be put on hold and certain flexibility in spending will be permitted. Running a higher budget deficit was the initial target but given the current state, running the deficit is a better option for now.

After the 2008 financial crisis, politicians and central banks around the world have managed to reduce the risk by kicking the can down the road. The only concern now is what if they face another crisis that is in the making? Can they avert that as well?

Gold Technical

Gold hovered at $ 1426 during the early Asian trading hours and as London opens, prices start to head lower. Stops were taken out and the support at $ 1418 gave way easily as gold eked out another negative day. Concern among gold investor’s remains on the continuous outflow of funds from gold back ETFs and a slowdown in physical demand could soon dampen the current rebound. India government placed additional curb to reduce demand for the yellow metal. Investors’ confidence in holding gold remains fragile as equities are providing a better alternative. Just like any other currencies, the stronger US dollar has added selling pressure on gold price.

Technically, gold is weak and more downside pressure could build from here. A break below the 61.8% retracement line will give the bears more ammo to drive prices down to retest previous low. The MACD is about to cross lower again and the RSI and the stochastic fast line seems to support the idea that there are more rooms to the downside for now. We look for a short recovery rally that will be a target for additional short selling.
Resistance: $ 1412, $1422, $ 1438 Support: $ 1391, $ 13855, $ 1325

Bearish – target $ 1350

Bullish – target $ 1600

Silver Technical

Silver prices tumbled after support at $ 23.19 gave way as it trades outside the descending triangle. The 4 hourly chart remain bearish and the MACD has crossed lower while the stochastic fast line remains weak. Previous support at 23.19 will now be resistance. The outlook on silver remains bleak and more downside pressure is expected in the next few weeks. We are not surprise to see a retest of $ 22.05 again.
Resistance: $ 23.19, $ 23.65, $ 25.59 Support: $ 22.50, $ 22.05, $ 19.00

Bearish – break below $ 23.15 could see a retest of $ 22.00

Bearish – a retest of $ 22 is possible and could go lower to $ 21.00 or $ 19.00

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The U.S. Comex gold futures fell 0.84 percent this week after falling 1.88 percent last week. In contrast, the Dollar Index climbed 0.54 percent after climbing 1.24 percent the week before. The S&P 500 Index surged 1.02 percent while the Euro Stoxx 50 index rose 0.37 percent after rising for three consecutive weeks.

Disconnect between the Real Economy and Asset Prices

Both stocks and bonds have reached elevated levels due to the stimulus by the global central banks but not because of strong economic growth. Bubble talks about bonds and stocks have surfaced as have the concerns that the Fed will taper off its QE program sooner than expected. The world’s largest bond house PIMCO recently warned of a sharp drop in the risky markets if economic growth turns out to be much worse. While the U.S. April retail sales unexpectedly rose 0.1 percent compared to a forecast of a 0.3 percent decline, the Chinese April fixed asset investment and industrial production both trailed estimates. After the ECB has cut interest rates, the central banks of Australia and Korea also unexpectedly lower interest rates as commodity prices and exports have weakened.

Gold Prices in a Tug of War

As Barclays pointed out, the strength in the physical demand has countered the gold-backed ETF outflows which amounted to 39 tonnes during the first week of May and about 380 tonnes year-to-date. However, Barclays believes that there is a bigger risk of the physical demand slowing down instead of the ETF flows bouncing back in the near term. With equities racing ahead and the U.S. dollar strengthening, gold prices will likely face renewed downward pressure. A U.S. dollar rally may be in store due to the relative U.S. economic outperformance, a higher bond risk premium and a fairly cheap currency. A stronger dollar will weaken commodity prices including gold. Nevertheless, the physical buyers and central banks will again be the supporter of gold prices at lower prices. The combined short speculative gold positions at the CFTC remained at a record high since 1999. This means that gold prices can be boosted by a short-covering rally at some point.


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The U.S. Comex gold futures fell 3.46 percent week-to-Thursday to $1,386.90, just $64 above the worst level reached in mid-April this year. Year-to-date, the gold futures dropped 17.24 percent, compared to a rise of 15.73 percent in the S&P 500 Index, 6.48 percent in the Euro Stoxx 50 index and 12.66 percent in the MSCI Developed World Index. The Dollar Index is also up 4.79 percent this year.

Softer Economic News but Higher Stock Prices

While Japan’s Q1 real GDP, driven by higher private consumption, jumped a higher-than-expected 3.5 percent, the Euro-area’s April inflation rate dropped to a three-year low to 1.2 percent while the Q1 real GDP declined 0.2 percent, its sixth quarter of contraction. The weekly jobless claims in the U.S. increased by 32,000 to 360,000. The Philadelphia Fed index and the New York’s manufacturing survey also unexpectedly contracted as the fiscal cuts have taken effect. Nevertheless, about 39 percent of the stocks in the S&P 500 Index reached their 52-week high according to Bloomberg. The Japanese Nikkei Index is also approaching a five-year high. The strength of the stock markets has surprised many investors who are still under-allocated to equities and are skeptical of the economic future.

Gold-Backed ETP Holdings Continued to Drop

As inflation is low and equity markets are rising, gold-backed ETP investors have been rotating out of gold.

The SPDR Gold Trust holdings dropped to a four-year low to 1,041 metric tons yesterday after reports show that investors such as Soros, Northern Trust and BlackRock have cut their holdings between 12 to more than 50 percent in Q1. Credit Suisse predicted that gold will trade at $1,100 next year, citing that gold is relatively expensive compared to other hard commodities. The World Gold Council reported that while gold-backed ETPs dropped 176.9 tonnes in Q1, total bar and coin demand surged 10 percent from a year ago to 377.7 tonnes while jewellery demand climbed 12 percent to 551 tonnes. Central Banks continued to add gold by over 100 tonnes for the seventh consecutive quarter. The tug of war between the physical buyers and the paper gold investors will likely continue.

What to Watch Next Week

Next week, various U.S. regional Fed Presidents will speak about the economy on 20, 21 and 23 of May. On 22 May, Japan will announce its Target rate, Ben Bernanke will make his testimony and the latest US FOMC minutes will be released. The U.S., Euro-17 and China will release the flash manufacturing PMI index for May on 23 May. Germany will report its IFO business climate index on 24 May.


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