-- Posted Monday, 3 November 2008 | Digg This Article
| Source: GoldSeek.com
The week that went by
Thank god October is over. This is what most of the equity and commodity traders must be telling themselves. October has been the worst month for equities and commodities in more than twenty years. The reason was a collapse of banks as well as countries. Pakistan, Hungary and Ukraine were all provided with IMF support. Silver and base metals recovered a bit while gold was unable to hold at higher prices. The US dollar also fell from its highs as equities rose. Japan and the Federal Reserve cut interest rates to 0.30% and 1.00% respectively. India also cut repo rates by 0.50% to prevent interest rates from rising.
This week
We have the (A) US elections on Tuesday (B) Thursday we have Bank of England and European central bank meetings where there is a possibility of surprise interest rate cut (C) Friday US October nonfarm payrolls. These are the key events to watch out this week. Each of them will have an impact of commodities as well as equities. There are other events as well. The worst of the economic news has been factored in by the markets unless they are pathetic. Investors will be using dips to invest. Euro/usd will fall if the ECB cuts interest rates.
November is the only month every year where all the commodity future expire. Comex Gold, silver and copper futures will expire on 30th November. MCX all the metal futures will expire on 30th November. Liquidity problems towards the close of the month could result in position squaring and rebuilding.
LEAD – A SHORT NOTE
LME lead (3 months) has recovered from the lows of $1170 to close the week at $1520. In MCX the Lead –Zinc ratio which was trading at Rs.3.0 around two weeks back rose to Rs.18.20 on Friday.
LME lead closing stocks have been falling for the whole of October suggesting that the fall in lead prices was due to liquidity factors.
Lead stocks need to rise over 60,000 MT to find sellers. Volumes in lead (LME) have been pathetic and need to rise for the real bull run. The current rise in lead prices has been due to lack of proper volumes which suggests that it is not out of the woods.
DAILY FOREX REPORT
RBI slashed the repurchase rate again, lowering it by 50 basis points to 7.5 percent. RBI also reduced the amount of deposits that lenders need to set aside as cash reserves to 5.5 percent from 6.5 percent, and in government debt to 24 percent from 25 percent. The Rupee will be volatile this week.
DAILY TECHNICAL ANALYSIS |
3rd November, 2008 |
CURRENCY | CMP | SUPPORT | RESISTANCE |
| | S4 | S3 | S2 | S1 | R1 | R2 | R3 | R4 |
EURO/USD | 1.2830 | 1.2330 | 1.2500 | 1.2640 | 1.2725 | 1.2840 | 1.2940 | 1.3012 | 1.3200 |
GBP/USD | 1.6189 | - | 1.5722 | 1.5980 | 1.6100 | 1.6320 | 1.6480 | 1.6544 | 1.6710 |
USD/JPY | 98.64 | - | 93.86 | 95.50 | 98.30 | 100.60 | 102.90 | 105.60 | - |
USD/CHF | 1.1528 | - | 1.1230 | 1.1326 | 1.1480 | 1.1630 | 1.1680 | 1.1744 | 1.1932 |
INDIAN RUPEE | 49.4600 | 48.3700 | 48.5100 | 48.8100 | 49.2000 | 49.7000 | 49.9800 | 50.0800 | 50.2000 |
INTRA DAY TRADING STRATEGY
EURO/USD: 1.2500 is the key weekly support. Sellers will emerge only on a consolidated fall below 1.2500. On the higher side a break of 1.3040 will result in 1.1330
Jobbers: Buy only on a break of 1.2940 till then a sell on rise strategy.
Day traders: Buy on dips as long as gold holds 1.2725 and 1.2530 holds.
GBP/USD: 1.5980 is the key intra day support with 1.6544 as the key weekly resistance.
Jobbers: Buy only on a break of 1.6320 till then a sell on rise strategy.
Day Traders: Buy on dips as long as 1.5980 holds.
USD/JPY: This week the yen is bullish over 100.60.
Jobbers: Buy on dips as long as 96.20 holds and sell on a consolidated fall below 96.20.
Day Traders: Buy only on a break of 100.60 till then a sell on rise strategy.
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Prepared By Chintan Karnani. Website www.insigniaconsultants.in
-- Posted Monday, 3 November 2008 | Digg This Article | Source: GoldSeek.com
