Gold, Oil & Indices (Equity & Bond Indices)

OUTLOOK July 6 2010

US markets return later in the day, with little event-risk noted on the calendar to keep wider volatility contained.

Currency News
EUR/USD: Recovers From drop overnight Official buying sparked the overnight EUR/USD bounce, but only after downside stops were taken out. Drop below 1.2500 triggered various stops en-route to the 1.2479 intraday low. However, Asian sovereign names were soon spotted on the bid and this helped return the price to the comfort of the 1.25s. Option dealers are again quick to highlight the 1.2500 intraday strikes, which could offer the EUR support should there be a dip later today. In terms of resistance today supply is still touted towards the 1.26-area to keep the immediate topside limited.

GBP/USD: Strong start to Tuesday Cable up at levels just above 1.5200 level seen yesterday. Thin late Monday action saw the Pound slip again, this time to 1.5080 but as soon as the Asian market got going the Pound was driven back up through intraday buy stops at 1.5150 and on to early Tuesday London highs around 1.5192.

Broad based Dollar weakness at play while UK domestic news has been thin on the ground. A new MPC member confirmed by the Chancellors office and press chatter about a UK government contingency plan should BP collapse. The BP story, in the Times, will no doubt heighten speculation that the oil giant could be broken up or taken over.

GBP/USD continues to meet a head wind in the 1.5200 area but the underlying trend is with the Pound and it look like only a drop under 1.50 will scupper the bulls party. For this session key support is in the 1.5080 area but we also expect to see profit taking should 1.5140 give out. On the day a 1.5150 to 1.5220 range expected with upside risk

USD/JPY: Back Up To Asian Levels, Offers Still at 88.00- USD/JPY fell from an early high of 87.78 to as low as 87.42 this morning in Asia, partially on dovish comments from Dallas Fed president Fisher, a renowned hawk. Mr. Fisher said it was much too early to begin hiking interest rates and that the Fed could go either way in its debt purchases programs depending on the economy, moving towards a sell-off of accumulated assets or renewed purchases. This and JPY cross weakness were behind the

USD/JPY move lower. Bidding interest did resurface from the 87.40-50 area and held firm despite talk of stops sub-87.40. The market later pushed back up as the JPY crosses went bid alongside the Nikkei. USD/JPY has since recorded a fresh session high of 87.84. Offering interest remains ahead of 88.00 following the failure at 88.01 yesterday. Some stops are seen above 88.10 however and could come into focus if JPY crosses remain upbeat. USD/JPY currently trades 87.85/88.

AUD/USD:-Bounces After Neutral RBA Statement The RBA left the cash rate at 4.5% as expected and delivered a neutral statement thereafter. The RBA noted that international growth was uneven with very strong growth in Asia and Latin America compensating for uneven growth in the advanced countries. The RBA also noted that European budgetary constraint is making growth prospects for next year uncertain. The RBA also noted tightness in the funding markets but not on the scale seen in 2008.

The RBA remained relatively upbeat towards the domestic economy noting the strong terms of trade and the likelihood business investment will increase. The statement suggests the RBA will keep rates on hold unless there are significant changes in the global and domestic economies.
The AUD/USD has bounced from 0.8370 to 0.8390 after the RBA Statement didnt sound a particularly cautious note regarding the global economy and certainly did not signal a dovish shift in bias. The AUD/USD trades 0.8485/90.

Stock Market

Asia
Asian stocks reversed course and inched up on Tuesday taking heart from gains in the Chinese market led by property and bank stocks, while the Australian dollar dribbled higher after the central bank sounded cautiously optimistic on the economic outlook. Stock markets cheered gains in Shanghai, the worlds second-worst performer after Athens. The Shanghai market has lost 27 percent since the start of the year, after Beijing introduced a range of policies to cool the real estate fever.

Europe
European shares have opened higher after falling to their lowest close in nearly six weeks yesterday. There was no lead from Wall Street, which was closed for the Independence Day holiday. Bund futures fell to a session low on Tuesday in very thin trade as European equities made gains, curbing safe haven flows into German debt.
A contraction in German construction activity intensified in June as new orders dipped across the sector. The Markit construction index which is based on a survey of 200 construction companies fell to a seasonally adjusted 46.7 from 48.6 in May, staying below the 50 level, which separates growth

hey mont.. i have a couple @ 1215...1197...but im also holding a couple @ 1166..1187 been holding them for awhile but im closing those out when im even on them.. hopeing that these better shorts pay me nicely ..lookin to close out @1165..mayb i catch a break an selling in gold excelllerates..love to see 1100:)..im very dissappointed in myself on the usdcad when we hit 1.0650 to me that was a huge short signal im sitting in tons of cash an should have taken up my position once we crossed over 1.0650...forgot 1 of ashraf rules...don;t always have to pick off the top /bottom just gettin in is all that matters:) hope i said that right..next run up to 1.0650 im taking up a huge short position..as for gold, flat is a great position at this level..gl guys:)

1170 next for gold

Hi Ashraf How are u i just want to know where u looking gold from present rate.

Thanks

Best Regards
Kidwai

ashraf
how do u see long term commitment on oil futures.
thanks