UK Pound recovers from its weekly looses
Today the UK Pound made a recovery against the US Dollar from its 2-Months low but still remains under pressure because of the Euro Zone Financial Crises. The UK Pound made a session low of $1.5731 but pared the losses and was trading at $1.5827 up 0.2 percent for the day as of 15:10 in New York.
Wednesday’s Inflation report by the Bank of England somehow indicates a possible further Quantitative Easing by the Bank of England to support the Economy that is not showing good figures for the year.
Next week Banks of England would be releasing its minutes of its policy meeting and it would be interesting to see how the UK Pound behaves when the latest policy minutes are released.
I would advise the investors to stay side line from the UK Pound as it is still vulnerable to the current Euro Zone Crises and we may see a bearish trend in upcoming weeks.
Europe Crises boosts demand for Gold
Gold rose today making a weekly high of $1,597.94. Gold rose on new speculations that the Euro Zone crises would deepen and the US Fed may introduce a new phase of Quantitative Easing in order to support growth in the United States.
Gold rose 2.5 percent yesterday and made gains of 1.1 percent today to settle at $1,591.90. Hope for more Quantitative Easing have certainly created a buying spell in the bullion for the last two days. Before yesterday the Gold had just entered into the bear market but a nearly 3.6 percent jump in just two days made the bullion out of the bear market.
The buying in Gold shows that investors have not lost faith in Gold and still can be considered as a safe haven. The bullion might be heading towards its 12 years of straight gains as it is still up 1.6 percent for the year.
Euro touches 4-Month low on German Finance Minsters comments
Euro touched a 4-Month low early in European trade when German Finance Minister Schaeuble said that crisis to last. Euro made a low of $1.2650 just before the European markets opened but reversed its losses as technical indicator showed that the 17-Nation currency fell too fast in the last week.
The buying today in the Euro can be seen as more of a technical in nature. Yesterday I warned the investors to stay away from the Euro as it is near its next major resistance level of $1.2600 and can rebound. The estimate seems to be perfectly in line with my analysis.
I still maintain a bearish trend in the Euro in the upcoming trading sessions as the buying today is more of a technical and not fundamental. The fundamental still remains week as there is no good news coming out of Europe.
Gold Rallies after Bear Market Test
Spot Gold rallied on Thursday posting a more than 2 percent gains on technical buying. Yesterday the Gold fell to a near 20 percent from its all time high $1,923.70 which it posted on 6th September 2011.
For Today’s buying all I can see is that it was just a technical short covering as yesterday the Gold was just trading above its 100-week moving average of $1,515. The bullion was trading at $1,574.25 as of 14:52 in New York after making a session high of $1,580.29.
I would ask the investors to stay aside as the Gold is very volatile because of the political developments in Europe and uncertainty of further Quantitative Easing by the US Fed. A possible signs of US Fed’s further QE may result into strong bullish trend in Gold in the upcoming trading weeks.
UK Pound Tumbles to near 2-Month low
The UK Pound fell on Thursday as on European political concerns and on the fragility of the Spanish banking sector. The UK Pound was also bearish as the Bank of England had cut growth forecasts for the ongoing fiscal year.
Yesterday’s Inflation report by the Bank of England does not give any favourable outlook for the economy and gives signs for a possible another round of Quantitative Easing.
The UK Pound made a session low of $1.5788 before paring its losses and was trading at $1.5810 as of 14:20 in New York. Pound fell against most of its major counterparts in the whole trading session.
Yesterday, after the Bank of England reports on Inflation and growth concerns I predicted that there would be a further fall and bearish trend for the UK Pound Sterling in the upcoming trading sessions which seems to be in line with my estimates.
I continue to maintain a bearish trend for the UK Pound Sterling in the upcoming trading sessions to come this week as there is no good news in the market that may give some strength to the UK Pound against the Greenback in the trading sessions to come ahead.
Euro little changed as Spain Debt’s Costs Increase
Euro was little changed trading at $1.2712 as of 13:40 in New York. The 17-Nation Currency earlier made a session low of $1.2666 on the news that the Spain Debt’s costs increased and selling pressure gripped the market sentiments.
I can see a lot of political uncertainty going on in Europe which is creating panic among the investors forcing them to take refuge by investing in safe havens like Yen or Swiss Franc.
A fresh 4-Month of new lows for Euro is not a good sign as the currency if failing to recover from losses and continues to make new lows in each trading session conferring a bearish market sentiment.
My analysis regarding the Euro over the last 10 trading sessions is perfectly in line with how the Euro is behaving. I predicted that the break of $1.30 level would lead to a new level of $1.26 to $1.28. The Euro is currently trading near $1.27 which is in line with my estimates.
I will continue to maintain a bearish sentiment in the upcoming trading sessions, advising the investors to remain side line as the Euro is heading towards its next resistance level of $1.26 which would be very crucial to watch. I can also see a possible short term rebound in the Euro in the upcoming trading sessions only if some good news comes out of the 17-Nation bloc.
UK Pound Falls on Growth concerns
The UK pound fell against the Dollar as Bank of England’s Governor Mr King stated in the press conference that any damage to the Euro Zone would have a huge impact on the UK Economy. The UK Pound fell immediately as the press release came. It fell to a session low of $1.5888 before paring its losses and was trading at $1.5950 as of 14:30 in London.
Pound fell for the consecutive second day as the European Debt Crises threatened the growth prospects of the UK Economy. According to my analysis the sharp decline of Pound against the US Dollar in the last few sessions may decrease the prospects of the UK Pound strengthening against the Greenback.
Canadian Dollar hits 16-Month low as fears of Greece Exit strengthens
Canadian dollar made a 16-Month low against the greenback as investors feared that a possible exit of Greece from the European Union will further ignite the European Debt crises and would pave a way to knock down struggling economies like Italy, Spain and Portugal in near future.
The Canadian dollar made a session low in the early Asian trade and traded as low as C$ 1.0131 against the greenback after recovering from early losses and was trading at $1.0080 against the greenback as of 12:05 in London.
Greece would be preparing for its elections not earlier than 17th June. I can see a lot of uncertainty in the Forex Market and expect a roller-coaster ride in the currency market until the Greece drama comes to an end. Germany, the largest economy in the Euro-Zone, stated today that it wants Greece as a stable economy in the Euro-Zone.
Euro-Zone crises drags Gold into Bear Market
Gold entered into the bear market today after tumbling for the fourth straight trading session. Gold came under selling pressure earlier in the European Trading as European Debt crises loomed and a press conference by Governor Bank of England Mr King stating that the UK Economy can be highly affected if Greece makes an exit out of the 17-Nation bloc.
Gold made a session low of $1,526.89 earlier in the European trade but made a quick recovery on a better than estimated US Data on housing starts and Industrial production increased confidence in the World’s No1 economy.
Gold was trading at $1,550 up 0.37 percent as of 15:44 in London after falling 1.1 percent in the early European trade. If I talk about the closing basis, the bullion needs to close at $1,513 to complete a 20 percent drop from its all time high of $1,923.70, which it posted on Sept 6th 2011.
Euro turmoil continues as Greece fails to form government
Euro fell for the straight 2nd session this week as it is becoming clear that Greece may be heading towards another election as in the current circumstances the political leaders have failed to reach a break through.
The 17-Nation currency seemed to be under immense pressure today, especially in the US Trading sessions and made a nose dive in the early US Trades. Euro was trading at $1.2727 as of 14:45 in New York near its trading session low.
The current political turmoil in Greece is fueling negative sentiments among the investors and boosting investors demands for safety.
As I analysed last week and this week, the bearish sentiment is to continue until some very good news comes out of Europe. The Euro is heading towards its next big resistance level of $1.26. Last week I maintained that the new level for Euro would be between $1.26 to $1.28. It is currently trading near $1.27 which is exactly in line with our analysis.
I advise the investors to stay side line in the upcoming trading sessions as there may be some short covering in the Euro before it starts to fall again.
