03/02/2014
Dear All Traders
Economic Development:
Sentiment was not helped by more downbeat reports from China where the official PMI dipped to 50.5 in January from December's 51, in line with market expectations. A separate survey of the service sector also showed a moderation in growth. Analysts cautioned that the ongoing Lunar New Year holiday, which began on January 31, probably dragged on output as manufacturers shut up shop for China's biggest annual holiday.
A selloff in emerging markets sent a cold chill down Wall Street, triggering a slide on Friday and making January its worst month since May 2012 after one of its best years in more than a decade.
U.S. economic data on consumption was fairly robust, reinforcing views the world's biggest economy can weather the emerging markets turmoil, enabling the Federal Reserve to keep reducing its stimulus. International Monetary Fund urged central banks on Friday to ensure that a financial market rout in the developing world does not lead to an international funding crunch.
Strains in emerging markets show little sign of abating, while growing pressure for another policy easing in Europe shoved the euro to 10-week lows. The week ahead has plenty of event risk with a raft of global business surveys and jobs data from the United States to offer a clearer view on how well the global economy is faring, while the ECB might well ease at its meeting on Thursday. While the euro zone is slowly recovering inflation is getting dangerously low, piling pressure on the ECB to take further policy action.
NYMEX crude oil futures fell during Asian trading hours on Monday on growing concerns over the economic outlook in emerging markets and the impact on future oil demand prospects.West Texas Intermediate crude fell for a second day amid speculation that China’s fuel demand will shrink as economic growth slows in the world’s second-biggest oil consumer.Markit Economics will release a final PMI for the U.S. today, while the ISM’s publishes its factory index. In the 18-nation euro area, the manufacturing gauge is projected to remain at 53.9 for January, while countries including Germany and France report final readings for the same month.
Technicals in Focus:
In daily charts, prices are sustaining below 50DMA (1238) become immediate resistance level. MACD is now above zero line and histogram are increasing mode will bring more bullish stance in the upcoming sessions. RSI is in neutral region, bounce is expected. The Stochastic Oscillator is approaching oversold territory and now giving negative crossover to confirm bearish stance for intraday trade.
Spot gold is expected to retrace further to $1,244 per ounce, as a correction from the Monday high of $1,278.01 has not completed. The correction has been caused by a resistance at $1,280, the 38.2 percent Fibonacci retracement on the fall from the Aug. 28, 2013 high of $1,433.31 to the Dec. 20, 2013 low of $1,185.10. The candlesticks on Monday and Jan. 24 have formed a bearish engulfing pattern, indicating a lower level than the Monday low of $1,251.69 could be touched. This level may be $1,244, the 23.6 percent retracement.
Have a Nice Trade
