Jalatama Loco London (XULF) Report 20/05/2013

XULF Report

Gold continues to slide reaching a low this morning of $1338 closing in on April’s low of $1321. The fall is mainly attributed to the Fed’s talk of reducing stimulus, a weakening Japanese yen and growth concerns in Europe and China. US Consumer Sentiment released on Friday night gave a boost to equities and consequentially applied more pressure to gold extending the bearish trend. There is a possibility gold could get a respite from this hammering after comments from the Japanese Economy Minister highlighting the potential negative impact of a weakening yen on the Japanese people that brought some sellers to the USD/JPY pair.

The 15 minute chart shows how the market is consolidating after the bears launched another attack this morning to make a low of $1338. Price is trading increasingly tighter displayed by the triangle therefore be poised to trade after a breakout from the consolidation and the intra-day trend asserts itself. If price breaks $1338 expect a bear attack to test April’s low $1321 although it is likely there will need to be fresh headline news for gold to drop below this level without a fight from the bulls.

The 4 hour chart shows the strength of the decline since it broke through $1420 support last Wednesday. There will be potential shorting opportunities as price draws nearer this bearish trendline as another crowd of shorts attempt to attack this market. This will offer a smaller risk entry compared to shorting the market now. Considering the strength of the trend bulls should wait for price to break up past the trendline shown on the chart because this will indicate the decline is decelerating.

There is a substantial amount of economic news that could affect the markets this week including Federal Reserve Chairman Ben Bernanke testifying in front of Congress 10pm Wednesday and manufacturing and services PMI data from Europe Thursday afternoon therefore reduce exposure around these times and trade carefully.

Market Analysis Monday 20th of May

ANALYSIS 20-05-2013

The Nikkei soars again a result of Government policy

Japanese shares listed for trading last Friday after a rise in the previous two days has decreased.

Japanese stocks rose as a result of the statement of the Prime Minister of Japan, Shinzo Abe, who said it would support a strategy to boost Japan’s economic growth in the short term. At the same time, the exchange rate of the yen against the dollar last Friday fell back so as to give impetus to the strengthening of shares based exporters.

Technically, the index in the trading session today, Monday (20/05) is likely to strengthen, test positive trend. On the M15 chart bullish hammer berformasi provide opportunities for the index to move upside. However, the volume is likely to increase, as well as an early indication of a bullish index. In addition, RSI, on the M15 chart, is in the oversold area, cue upside.

Expected, the index tested the first resistance level of 15440 and 15517. If it fails at 15 315, then the next index is expected to tend to retest the support level 15210 and continued to be in the area of ​​15122 possibilities.

Japanese Yen Strengthens After AIG Moves Up to 4.5 Year Low Last Week

In today’s trading the Japanese yen trying to strengthen against the U.S. dollar (20/05). The yen strengthened against all 16 major counterparts after Japan’s Economics Minister Akira Amari said that a weaker yen will further threaten the people who had received negative impact of the yen tumbled and the government is expected to be difficult to minimize these impacts.

Technically, today’s trading session on Monday (20/05), the dollar yen pair has a chance to move in a positive trend.

A stronger yen primarily expected soon reexamine the minimal resistance at 104.33 and 105.45 maximum. Meanwhile, if the Yen was able to break and stays below 102.87 then another alternative scenario that is likely to test support Yen’s in the area of ​​101.86 and 109.98.

Strong dollar, Golden Touch 1 Month Low

Gold fell the seventh straight session on Friday, the longest series of losses in four years, as the dollar rose to its highest level since 2008 after Federal Reserve officials said the U.S. central bank should end stimulus for the U.S. economy.

Technically, gold at today’s trading session on Monday (20/05) potentially bearish, test returned negative trend, but prone to reversal. RSI indicator tends to re-test support channel and towards the oversold area, but Bollinger Band which began to widen, thus giving impetus to gold to the upside.

Estimated gold price immediately prior to test support at least in the area of ​​1310.32 and re-test the maximum level of 1285.89. However, if the price of gold is able to break and hold above 1348.35 then estimated the price of gold could potentially test the Resistance 1379.10 and 1409.76.

Jalatama Loco London (XULF) Report 17/05/2013

XULF Report

Gold received another hammering yesterday falling to a low $1369 before bouncing back assisted by disappointing US data last night. Federal Reserve official John Williams speaking about reducing stimulus as early as this summer dampened the optimism on Wall Street but didn’t cause gold to drop any further. We are seeing a repetitive scene at the moment with economic data swinging from positive to negative and a constant wavering in expectations to the Fed’s next move which will add to gold’s volatility but definitely present opportunities. Today is predominantly absent of any potentially market moving scheduled data except US Consumer Sentiment later tonight therefore gold does have a chance to claw back some of its losses however given the current environment any recovery may be limited.

The daily chart is giving early signs of a possible reversal belonging to yesterday’s hammer and the fact that this hammer printed totally outside of the lower Bollinger band. In addition the RSI is hovering around the 30 level indicating this market is tinkering with the oversold territory. It is difficult to pick the turning point after such a drop but if the next wave is caught at the right time it can be very rewarding indeed. Do be aware though that we are in a strong bear trend and yesterday’s low of $1369 could be broken.

Drilling down further onto the 4 hour chart the Parabolic indicator has signalled a buying opportunity and a return to above 30 for the RSI. My suggestion would be to wait for further reversal confirmation before entering a long position by assessing the 15 minute and 1 hour charts looking for today’s decline to lose steam and a bullish candlestick to print. For added confirmation wait for a double bottom to form completing the neckline at $1393.

Market Analysis Firday 17th of May

ANALYSIS 17-05-2013

The Hang Seng Index Back Up, Domination Increase Banking Stocks

Hong Kong shares to trading Thursday and closed to increase exchanges to survive the drop down 23,000 basis points. Strengthening exchanges this time is rebounding after two days in a row before declining. Soaring U.S. stock market overnight gave a solid boost, especially on stocks in the banking sector.

Technically, the index in the trading session today, Friday (17/05) is likely to strengthen, test positive trend. On the M15 chart bullish hammer berformasi provide opportunities for the index to move upside. However, the volume is likely to increase, as well as an early indication of a bullish index. In addition, RSI, on the M15 chart, is in the oversold area, cue upside.

Expected, the index tested the first resistance level of 23058 and 23119. If it fails in 22973, we then estimated the index tends to retest the support level of 22911 and continued up to the possibility of being in the 22854 area.

Against the Weak Data Rate Strengthening Dollar

For the first time in six sessions the U.S. dollar slipped versus the euro after the data again highlighted the vulnerability of the U.S. economy, which erodes expectations of the termination of the Federal Reserve’s stimulus program in the near future.

Technically, today’s trading session on Friday (17/05), the pair euro dollar likely to move in a positive trend.

A stronger Euro is mainly expected to soon re-test the resistance at 1.2990 minimum and maximum 1.3066. Meanwhile, if the Euro was unable to break and stays below 1.2883 then another alternative scenario the Euro likely to test support at the 1.2804 area and 1.2722.

Gold prices Makin dimmed, Lowest Since December 2011

Gold prices to trade currently have dipped after the emergence of reports that gold holdings in the SPDR yesterday declined by 0.4% to 1047.13 metric tons or been touched to the lowest number since March of 2009. At the same time, ETP Holdings also reported that during this year the amount of gold holdings are kept in the company has decreased by 16%.

Technically, gold at today’s trading session on Friday (17/05) potentially bearish, test returned negative trend, but prone to reversal. RSI indicator tends to re-test support channel and towards the oversold area, but Bollinger Band which began to widen, thus giving impetus to gold to the upside.

Estimated gold price immediately prior to test support at least in the area of ​​1344.13 and re-test the maximum level of 1312.07. However, if the price of gold is able to break and hold above 1386.35 then estimated the price of gold could potentially test the Resistance 1417.27 and 1448.33.

Jalatama Loco London (XULF) Report 16/05/2013

XULF Report

As anticipated dire GDP numbers from Europe yesterday forced gold to break $1420 support with a weakening EUR/USD pair providing a catalyst and it smashed through the $1405 target making a low of $1387. Japanese GDP was released this morning showing Prime Minister’s Shinzo Abe’s stimulus attempts are paying off which should provide some short term fundamental support for gold given Japan are a large importer of the metal. Possible downside pressure on gold could occur when the US markets open as computer network giant Cisco Systems delivered better than expected quarterly results after market hours which could set a bullish tone for equities.

The 4 hour chart manifests how the decline has paused for breath and the two hammers side by side, along with the RSI moving back above 30 indicates a retracement is ready before the bearish trend takes control again. As I write price is $1396 therefore place a long stop loss below the low at $1386 or place a tighter stop loss just below a higher low on the 5 minute chart at $1393 or $1389. It’s best not to be too greedy during retracements therefore target around $1405 which is the 38.2% Fib level of yesterday’s drop.

The 15 minute chart shows the loss of downward momentum and the recent sharp decline of $10 to $1387 followed by a steady incline displays how the short term trend is changing. A firm break up pass today’s resistance at $1397 should lead to a retracement to $1405.

Be aware of weekly US Jobless Claims and Building Permits tonight as investors will have a close eye on these numbers for further evidence of economic recovery which could impact gold.

Market Analysis Thursday 16th of May

ANALYSIS 16-05-2013

Nikkei index soars, Highest Since December 2007

Japanese stocks for day trading closed Wednesday rose and touched its highest level since 2007 after the yen weakened against the dollar back into a solid boost to the movement of the Japanese stock market in recent times.

Technically, the index in the trading session today, Thursday (16/05) is likely to strengthen, test positive trend. On the M15 chart bullish hammer formed has provide opportunities for the index to move upside. However, the volume is likely to increase, as well as an early indication of a bullish index. In addition, RSI, on the M15 chart, is in the oversold area, cue upside.

Expected, the index tested the first resistance level of 15 352 and 15440. If it fails in 15170, we then estimated the index tends to retest the support level of 15039 and continued up to the possibility of being in the 14916 area.

BoE Inflation report relieves Sterling

Sterling traded higher against almost all of its 16 major counterparts after the Bank of England raised the outlook for the UK economy. In its quarterly inflation report, the BoE raised its growth forecast to 0.5% for the quarter from 0.3% in the first quarter and expects inflation to peak 3.1% in the 3rd quarter, lower than projected in February. Cable also drawn support from the drop in jobless claims in April.

Technically, today’s trading session on Thursday (16/05), Sterling couple bucks a chance to move in a positive trend.

Strengthening of Sterling primarily expected soon reexamine the minimal resistance at 1.5316 and 1.5373 maximum. Meanwhile, if Sterling was unable to break and stays below 1.5231 then another alternative scenario that is likely to test support Sterling’s in the area of ​​1.5170 and 1.5120.

Gold futures tumbles below $ 1.400

Gold futures fell below $ 1,400 an ounce, continuing the longest fall in nearly three months, with the U.S. dollar rally eroded demand for the metal as an alternative investment. Silver fell to a three-week low.

Technically, gold at today’s trading session on Thursday (16/05) potentially bearish, test returned negative trend, but prone to reversal. RSI indicator tends to re-test support channel and towards the oversold area, but Bollinger Band which began to widen, thus giving impetus to gold to the upside.

Estimated gold price immediately prior to test support at least in the area of ​​1353.15 and re-test the maximum level of 1322.09. However, if the price of gold is able to break and hold above 1395.95 then estimated the price of gold could potentially test the Resistance 1427.29 and 1454.34.

Jalatama Loco London (XULF) Report 15/05/2013

XULF Report

Optimism is still very high across equities driven by a weakening yen and an upbeat earnings season which is preventing gold from claiming back its losses from last Friday. German, French and overall Eurozone GDP numbers are out in the afternoon that could force gold to re-test support at $1420 and $1423 if the EUR/USD pair weakens on worse than expected data.

Since last Friday’s drop the charts are showing how the bulls are defending their line at $1420/23 against the bears attack as they close in on enemy lines trying to break down the $1420 wall. This is illustrated by the substantial lower highs and the higher lows establishing in rather small increments, if any, which shows the selling pressure is building. A descending triangle can actually be drawn with the lower highs and support levels. Price activity has been accumulating just a few dollars higher than support for a few hours now which indicates shorts are building positions. Another test of this support level is likely to result in a collapse and the short target level is $1405 where it is likely to find some support again. Wait for some downward momentum or a strong bearish candlestick before shorting and add to the position once $1420 support is broken. Place stop losses above the lower highs shown on this 1 hour chart at either $1439 or $1445 as a rally past these will signal more range bound trading.