The outcome of the Fed meeting will dictate the short term direction of the US dollar. Overall medium term to long term bearishness for the US dollar remains intact, irrespective of an interest rate cut. It's all about the pace of decline of the US dollar which has surprised everybody. The US dollar could gain after the Fed meeting as interest rate cuts have been factored in by the markets and if fridays october payroll numbers come in better than expected, there could be short term gains.
Even the stock trader’s globally are looking forward to the Fed meeting as they expect equities to rise after the Fed meeting. Mr.Bernanke has a lot of pressure on him to deliver an interest rate cut, which he will not disappoint. Indian equities and other emerging market equities have risen sharply as a result of September interest rate cut. There will be further gains in them even if the Fed cuts by quarter of a percentage.
Copper, zinc and other base metals have been finding sellers at higher levels. If global growth is to slowdown even by a quarter of percentage in 2008, why should base metals rise. As demand pressures eases and supply increases, price should fall in the long term. In the short term they will be volatile. Base metals trading has caught up in a big way in India, particularly in the state of Rajasthan. In MCX price zinc prices are at a historical low. However LME prices are still over 2003 low's.
COPPER -- DECEMBER
Failure of copper to hold $343 will result in fall to $337 and $326. It needs to break $355 to be in intra day bullish zone.
NYMEX CRUDE OIL --FUTURE
There has been profit taking ahead of weekly US inventories numbers. Unless they come in exceptionally higher, crude oil prices will rise. Crude oil has to close over $87.80 and open over $87.80 tomorrow morning for $100, If it does not happen crude oil will to $82 in short term.
Happy Profitable Trading
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-- Posted Wednesday, 31 October 2007 | Digg This Article | Source: GoldSeek.com
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