Technical Forecasts

The pair is trading along an sideways trend.

The uptrend may be expected to continue in case the market rises above resistance level 1.3285, which will be followed by reaching resistance level 1.3345.An downtrend started from current levels (1.3237), which will be followed by moving down to support level 1.3180.
Resistances: 1.3260, 1.3285, 1.3345
Supports: 1.3180, 1.3115





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Good morning everyone. Friday’s forecasts went in our direction for the most part. Again as we thought it would the market did make some quick moves, specially after the NFP release. Today we might be at cross roads, looks like markets could set up a foundation for a turn around, but this is a long shot. Expecting US Dollar to strengthen & *also Japanese Yen to strengthen. I’m adding a hedged pair to offset the trading risk today. Happy trading everyone!!

Forecasts Outlook US Dollar : Strong
Today we're expecting the EURUSD to proceed Short below the barrier levels of 1.32511 and 1.32141.

Fundamental Watch






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Sideways
Daily Indicators
Rising
21 HR EMA
1.5546
55 HR EMA
1.5510
Trend Hourly Chart
Near term down
Hourly Indicators
Turning down
13 HR RSI
55
14 HR DMI
+veDaily Analysis
Consolidation with mild downside bias
Resistance
1.5685 - Last Thur's high
1.5607 - May 01 high
1.5565 - Last Fri's NY res
Support
1.5488 - Last Fri's NY low
1.5434 - Last Thur's NY low
1.5382 - Last Thur's low

GBP/USD - 1.5553 ... The British pound maintained a firm undertone throughout last week n cable rallied fm Mon's low of 1.5193 to a 3-month high at 1.5685 on Thur b4 retreating strongly to 1.5488 on Fri due to dlr's broadbased strength after the release of U.S. jobs report.

Although Fri's strg retreat fm 1.5605 to 1.5488 suggests recent erratic upmove fm Mar's 2-1/2 year low at 1.4832 has made a temp. top at 1.5685 n consolidation with mild downside bias wud be seen for a minor retracement of intermediate rise fm May's low at 1.5008 to 1.5426/34 (minimum 38.2% r n last Thur's NY low respectively). Looking at the daily chart, as last week's rally abv 1.5607 (May's high) signals another leg of upmove fm 1.4832 has taken place, suggesting as long as 1.5382 (last Thur's low) holds, recent series of higher lows n higher highs wud remain intact n abv 1.5685 res wud extend gain to 1.5783, being equality proj. of 1.4832-1.5607 measured fm 1.5008, later.

Today, we are holding short position entered on Fri with stop abv 1.5565 res (NY), break wud defer n risk stronger gain to 1.5605/07.




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Bullion Round Up

After a hectic start to the month of June, we expect a period of consolidation this week as investors look to digest last week economic data that could set the tone for the rest of this month. Lately, the US economic data has not been encouraging but Fed officials remains steadfast to experiment with their tapering project to gauge market reaction. US equity market did not see this as a vote of confidence and started the month with profit taking. Traders are cautiously worried as tapering may not happen as quickly as the Fed hope given the latest round of weak data. On the other hand, they would like to keep the rally in the equity market going. Dip buying is becoming an essential element as the equity market continues to face volatility. Unless the Fed gets the economic data that it desire, equity traders expect no tapering as a good sign.

Meanwhile, the Japanese equity index - Nikkei continue to be headline financial news. After the BOJ bold asset purchasing programme was enacted, the index enjoyed unprecedented rally with a weakening of the Japanese Yen. The jubilant times was celebrated with optimism but alas all this do come to an end. Last Friday Nonfarm payroll data came in better than expected at 175k against 165k but unemployment rate remains steadfast at 7.6%. Fed officials are keeping a close eye on the unemployment rate and market felt that the talk on tapering is off the table at the moment. Global equities soared higher and the world still needs US dollars! Gold and silver took a big hit lower as the selloff intensifies post NFP data since investors flock to prop up the dollar index. We felt that the talk of no tapering will soon play out that the dollar rebound is temporary. In addition, hedge funds are placing bet on higher gold prices and with short covering in mind we favour higher gold prices.

Our short term outlook remains unchanged at the moment. The next direction on gold and silver remains data orientated and we stand by our previous short term outlook on gold remains murky as prices trade in the range of $ 1380 to $ 1420. It is becoming a repetitive ritual that one must short gold if it re-enter or break above $ 1400. The short sellers have interest to do so and this indicates that a break above $ 1425 will encourage more short covering. On the other hand, a break below $ 1380 could spell trouble and selling pressure could increase again. The risk to the downside remains but short term trading favour a higher gold price. If the situation permits, a weaker dollar index to continue, correction in equity, increase uptake on ETFs product and with a decent physical demand may help gold retest resistance at $ 1424 area. However, our long term projection is to see this small rebound to falter and gold to retest previous low at $ 1321 or even lower.

Gold Technical

After the euphoria of breaking out of the tight range trading, prices straight back to where it all started. Gold found support at $ 1381.13 after the better than expected NFP data, sending the dollar and equities higher. It seems that gold will remain in the space of $ 1380 to $ 1420 area for a little while until another breakout from the range appears. Market in the weeks ahead will remain choppy and we could potentially see a rise in gold price when the dollar rebound ends as there is talk of no tapering.

Looking forward, a short term rally in a bear market is to be expected. Another bout of short selling opportunities is in the making and we would not be surprise that resistance at $ 1487.00 will be strong. Gold will try to break above $ 1425.00 but will then face a period of consolidation before taking out $ 1440.00. A period of short covering in the next few weeks could help propel a higher price but we are not surprise to hit resistance and went back down to $ 1321.00 again.

Resistance: $ 1423, $1437, $ 1438 Support: $ 1384, $ 1373, $ 1325
Traders Notes: Short gold as it breaks trend line at $ 1390 with an open target – stop loss stands at $ 1402.

Bullish – target $ 1460

Bearish – target $ 1280

Silver Technical

It looks like we were right to point out from last week commentary that we remain disappointed with Silver. After a better NFP data, Silver rose as high as $ 22.83 before giving up all its gains to a low of $ 21.88. Support was found at the lower range of the Bollinger band while the RSI continues to rise. However, the stochastic fast line has crossed lower and this could well mean more selling pressure ahead. Silver continues to trade in a downtrend and it broke below its 20 DMA after the selloff. Only a break above $ 23.35 will it encourage the bears to do more short covering.

Resistance: $ 23.19, $ 23.35, $ 25.59 Support: $ 21.80, $ 19.66, $ 19.00
Traders Notes: Stay on the side line.

Bullish – Retest $ 24.50

Bullish – a potential bull run?

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Good morning everyone. Monday’s forecasts went in our direction for the most part, except for two pairs that struggled but all others performed close to what was thought possible. As suspected yesterday we still seem to be at at cross roads, looks like still the markets could be setting up a foundation for a turn around, but this is a long shot as markets may continue the current trend & continue to surpass recent highs. Expecting US Dollar to weaken mildly but will be taking a mixed stance on this for today. Also we may see Japanese Yen letting off some steam. I’m adding two hedged pair to offset the trading risk. Happy trading everyone!!

Forecasts OutlookUS Dollar : Mixed Sentiments

Today we're expecting the EURUSD to proceed Long above the barrier levels of 1.32056 and 1.32355.


Fundamental Watch
- Monetary Policy Statement





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Bullion Round Up

Once again, the take down on gold happened on the basis of an important economic data which further suggest investors’ lack of interest on the yellow metal. A better than expected NFP numbers sent a strong message that the US labour market is recovering and well. This indicates that the Fed could start the tapering programme on QE as early as this summer despite the fact that unemployment rate came in higher at 7.6% (Fed’s target is 6.5%). Chairman Bernanke remains dovish and supportive of the existing QE programme but talks on tapering has escalated among other Fed officials. Economic data streaming out of the US remains mixed but the market has decided not to bet against the herd of US dollar and equity bulls. The stock market recovered all the losses and dip buyers re-entered the market in hordes as the data was highly welcomed and end the short term correction. The market was discounting for a miss on the NFP data and many got caught out in the wave.

The beginning of the month showed that gold prices remain susceptible to US economic data, the strong US dollar index and the current performance of stock market. There was clear pressure of a potential short covering if the NFP data came in lower than expected. Gold failed to break $ 1424 (38.2% retracement line from previous low of $ 1321 to $ 1488 area) and the build-up on a potential short covering was a weak one. This is because gold have failed repeatedly to hold above $ 1400.00 level despite putting up a brave attempt to support the prices on several occasions – resulting in higher lows. Renewed selling appears whenever gold was trading at or above $ 1400.00. Initially, the breakout of the tight range trading was a promising sign but failure on gold to capitalise on the weaker dollar sent a strong message that the market was just not ready to move higher.

The short term outlook on gold is biased to the downside as the next minor support comes in at $ 1373 followed by $ 1354 and $ 1339. After the rejection on a move higher, it opens up more rooms for the bears to pressure for lower prices. Renewed short selling at or above $ 1400.00 indicate that will be a strong resistance and only a break above $ 1425 will enable the bulls to aim for higher prices. In the meantime, we expect a period of consolidation but with a biased downside potential.

Gold Technical

Support was found at $ 1375 area as gold continue to trade within the range of previous low $ 1373 and $ 1423 levels. Initially, a stronger dollar and rallying equities added selling pressure. Buying interest was evident when the dollar weakened as St Louis President Fed Bullard speaks of his concern on deflation and the need to see a higher inflation numbers. He added by suggesting that the Fed could only taper if the labour market improve. On the other hand, WSJ Jon Hilsenrath made comments that we could see Fed’s tapering action as early as the June FOMC meeting. Market in the weeks ahead will remain choppy and we expect gold to further consolidate but will face strong resistance at $ 1390, $ 1395 and $ 1400.

Resistance: $ 1395, $1400, $ 1423 Support: $ 1375, $ 1373, $ 1325
Traders Notes: Short gold as it breaks trend line at $ 1390 with an open target – stop loss stands at $ 1402.

Bullish – target $ 1460

Bearish – target $ 1280

[/h] Silver Technical

The dollar index met resistance as it attempted to cross higher and failed to breakout from the downtrend that started from last month. Silver gained as dip buyers enter the market at $ 21.41 and managed to push the metal pass $ 22.04. The selloff last Friday meant that the bears are alive and well. We are not surprise to see further selling pressure in this market if the dollar rebound higher. However, we expect strong support coming in below $ 21.00 but a break below that would meant a revisit to previous low at $ 20.00. Silver continues to trade in a downtrend and it broke below its 20 DMA after the selloff. Only a break above $ 23.35 will it encourage the bears to do more short covering.

Resistance: $ 22.20, $ 23.35, $ 25.59 Support: $ 21.10, $ 19.66, $ 19.00
Traders Notes: Stay on the side line.

Bearish

Bullish – a potential bull run?

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The U.S. Comex gold futures fell 0.43 percent this week to $1,377 on Tuesday after trading as high as $1,423 on 6 June. The Dollar Index fell to 81.034 on 11 June after plunging 2.05 percent last week. The S&P 500 index and the Euro Stoxx 50 index fell 1.05 percent and 1.50 percent respectively in the past two days. Emerging markets equities were harder hit, falling 2.68 percent in the same period. The Japanese Yen surged 1.59 percent while the Euro Dollar rose 0.71 percent against the U.S. Dollar this week.
Concerns about Central Bank Policies

Investors are preoccupied by what the global central banks’ next moves will be. The U.S. May payrolls rose 175,000 versus 149,000 in April while the May unemployment rate climbed 0.1 percent to 7.6 percent. The more positive data cheered the stock market and added to the expectation that the Fed would taper its QE programme sooner than expected. The Bank of Japan governor recently said that he did not see the need to add more stimulus measures or additional tools to calm down the bond market. The BOJ will stay pat to increase the monetary base by 60 to 70 trillion yen a year as well as provide a one-year fixed rate loan to the private sector. The BOJ recently also revised up its economic growth assessment from 0.9 percent in Q1 to 1.0 percent. Global stocks and gold have priced in more central bank stimulus actions although the policy makers are unlikely to do more in the short-term.
Investors’ Positioning in Gold

The net combined positions in gold by speculators rose 17.5 percent for the week ending 4 June after reaching a four-and-a-half year low on 28 May. The short positions fell for the first time since mid-April. According to Bloomberg, the gold-backed ETP holdings fell to a two-year low of 2,127 metric tons as of 11 June. Barclays expects that while physical demand from Asia remains healthy, the ETP net redemptions will likely outpace the physical demand for gold.


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Bullion Round Up

Gold held relatively well in the early Asian trading hours - supported by a weaker US dollars as well as the lack of trading volume since China is away on holiday. The lack of buying from the Chinese gave the bears an extra edge to take gold lower. A break below previous low of $ 1373 could open the floodgate to lower numbers such as $ 1365 to $ 1355 area. Current negative sentiments do not support gold prices in the short term. After its valiant attempt to break and stay above $ 1400 failed, gold bears are dominating the realm. Any excerpt of negative views that diminishes gold prices continues to add selling pressure while other positive catalysts have failed numerously to prop a higher gold prices. Gold remains under the bears control for some time but we are keeping a close eye on a possible rebound once the sellers are exhausted.

The US dollar index continue to affect bullion prices but we do take note that the DYX is contained in a downtrend channel and poised to break lower if it fail to hold on previous low of 81.07. Global equities are also facing dilemma as the bulls are trying to push prices higher to continue the rally. We continue to question the viability of a higher equity prices when company earnings fail to reflect or justify the current prices. Some analysts raised the alarm that the Fed QE programme has in fact inflated the housing market in the US as well as equity markets. Questions were raised if this is sustainable at all and if a major correction is due?

The short term outlook on gold is biased to the downside as the next minor support comes in at $ 1373 followed by $ 1367, $1354 and $ 1339. After the rejection on a move higher, it opens up more rooms for the bears to pressure for lower prices. Renewed short selling at or above $ 1400.00 indicate that the area is a strong resistance and only a break above $ 1425 will enable the bulls to aim for higher prices. In the meantime, we expect a period of consolidation but with a biased downside potential.

Gold Technical

Rumour on the Fed tapering as early as next week in the region of $ 5- $ 10 billion dollars sent equities lower and DYX higher. Initially, gold found support at $ 1367 and rebounded higher to $ 1376 before the rumour hit the market. We expect prices to rebound but selling pressure continue to dominate. A break pass $ 1367 will trigger lower prices around $ 1355 to $ 1345 area. The bears are clearly winning and have the intention to revisit $ 1321 level. However, the previous low at $ 1338 will be a strong support and only if that is given then we see a potential stop loss trigger scenario that could sent gold lower.

Resistance: $ 1395, $1400, $ 1423 Support: $ 1367, $ 1355, $ 1325
Traders Notes: Short gold as it breaks trend line at $ 1390 with an open target – stop loss stands at $ 1402.

Bearish – target $ 1340

Bearish – target $ 1280

Silver Technical

As per our last commentary, we watched the dollar index closely as it continue to affect silver prices. The DYX meet resistance as it attempted to breakout from the downtrend that started from last May – after posting a high of 84.46. After posting a high of $ 22.04 prices drop lower despite the selloff in equities and the US dollar general weakness. The metal put higher low but lower high which indicate further weakness ahead. We are not surprise to see further selling pressure in this market if the dollar rebound higher. A break below $ 21.00 will open the floodgate to previous low at $ 20.00. Silver continues to trade in a downtrend and it broke below its 20 DMA after the selloff. Only a break above $ 23.35 will it encourage the bears to do more short covering.

Resistance: $ 22.20, $ 23.35, $ 25.59 Support: $ 21.10, $ 19.66, $ 19.00
Traders Notes: Stay on the side line.

Bearish

Bullish – a potential bull run?

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Bullion Round Up

The Chinese are back from their 3 day public holiday but we are not surprised at the lack of interest in bullion. From the beginning of this week, gold has continued to trade lower lows and technically looks weak. More downside risk is expected after gold failure to conquer and hold above $ 1400.00 level. Several analysts have called for lower numbers and a possible revisit of $ 1338 and $ 1321 level in the next few weeks. Technically, this is highly possible with the addition of a bearish sentiment overshadowing the market. Despite numerous environments that support a higher bullion prices, gold failed to shine and once again indicate investors’ lack of interest for the safe haven asset. Given the lack of financial crisis and uncertainty, the great asset reallocation has shifted from safe haven assets to other high yielding investments – such as the stock market.

Central banks around the world are busy debasing their currencies by printing new money but the lack of inflation in the economy reduce the need to hold gold as a hedge. The US housing market is recovering while the stock markets are generating a positive outcome which improves market confidence. Talks among Fed officials to reduce the current QE programme also added strength to the US dollar index. Gold astronomical rise was in part due to Fed easing programme – and the reduction of easy money could well reduce the need to hold gold. We have seen heavy redemptions and outflows from gold backed ETFs as hedge funds look to invest elsewhere. The outflow started after gold hit previous high of $ 1800.00 (October 2012) and it has continued in the current downtrend. Previous support at $ 1525 now turn strong resistance, gave way and prices hit to a low of $ 1321 in a space of 2 trading days. Heavy liquidation and panic selling lead the way. Meanwhile, gold did rebound from the low but has continuously failed once it hit above the 20 DMA. Looking forward, gold remains under the bears control for some time but we are keeping a close eye on a possible rebound once the sellers are exhausted. The US dollar index continue to affect bullion prices but we do take note that the DYX is contained in a downtrend channel and poised to break lower if it fail to hold on previous low of 81.07. Global equities are also facing dilemma as the bulls are trying to push prices higher to continue the rally. We continue to question the viability of a higher equity prices when company earnings fail to reflect or justify the current prices. The short term outlook on gold is biased to the downside as the next minor support comes in at $ 1373 followed by $ 1367, $1354 and $ 1339. After the rejection on a move higher, it opens up more rooms for the bears to pressure for lower prices. Renewed short selling at or above $ 1400.00 indicate that the area is a strong resistance and only a break above $ 1425 will enable the bulls to aim for higher prices. In the meantime, we expect a period of consolidation but with a biased downside potential.

Gold Technical

Gold held well above $ 1373 area after a retest of $ 1365 – currently rebounding higher on the back of a weaker US dollar index. Other commodities such as Crude Oil July contract also posted higher numbers. Meanwhile, the Japanese Yen continue to strengthen and add pressure on the Nikkei as well as other stock market. Gold prices hit higher after a lacklustre European trading hours and volatility sets in the market as dollar index hit as low as 80.88 areas well below its 200 DMA. We continue to expect a sell in any rallies that gold made. A break pass $ 1367 will trigger lower prices around $ 1355 to $ 1345 area. The bears are clearly winning and have the intention to revisit $ 1321 level. However, the previous low at $ 1338 will be a strong support and only if that is given then we see a potential stop loss trigger scenario that could sent gold lower.

Resistance: $ 1395, $1400, $ 1423 Support: $ 1367, $ 1355, $ 1325
Traders Notes: Short gold as it breaks trend line at $ 1390 with an open target – stop loss stands at $ 1402.

Bearish – target $ 1340

Bearish – target $ 1280

Silver Technical

Once again, silver hit a high of $ 22.02 on the back of a weaker dollar index and sell off in equities. We remain disappointed at the lack of momentum to push for higher prices and this further indicate that the rebound in prices is minimal and rallies are to be sold. The metal put higher low but lower high which indicate further weakness ahead. We are not surprise to see further selling pressure in this market if the dollar rebound higher. A break below $ 21.00 will open the floodgate to previous low at $ 20.00. Silver continues to trade in a downtrend and it broke below its 20 DMA after the selloff. Only a break above $ 23.35 will it encourage the bears to do more short covering.

Resistance: $ 22.20, $ 23.35, $ 25.59 Support: $ 21.10, $ 19.66, $ 19.00
Traders Notes: Stay on the side line.

Bearish

Bullish – a potential bull run?

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Good morning everyone. Wednesday’s forecasts went in our direction for the most part, infact all pairs behaved as we had predicted & what was thought possible. As suspected yesterday we still seem to be at at cross roads, however on some pairs the market has breached its previous highs by a small margin this could also be considered as a double top. Taking a mixed stance on US Dollar while Japanese Yen could continue to gaining some strength today. I’m adding two hedged pairs to offset the trading risk. Happy trading everyone!!

Forecasts OutlookUS Dollar : Weak
Today we're expecting the EURUSD to proceed Long above the barrier levels of 1.33146 and 1.33443.

Fundamental Watch- Core Retail Sales m/m
- Retail Sales m/m
- Unemployment Claims





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