The Global Market Trader Weekly Update – 12th September 2011
Hi friends,
The week panned out well except for Friday where Global markets saw a sell-off in risk assets. The dollar gained strength on account of a very weak EURO and the GBP also went down in line with the EURO. Gold in a trading range and remains on course to $2000.Market Volatility has increased and this is likely to continue further in the coming week. The Indian market which was looking good also saw a deep cut on Friday. Market players would be looking forward to the RBI policy which is on 16th September for long term cues. Nothing much came in from Mr Bernanke’s speech and not much was made of the job plan scheme which the US President spoke off. Further downside is expected for US as well as the Indian markets in coming weeks.
What Are The Markets Saying?
US Markets
Dow Jones Industrial Average
The index closed decisively below 11000. The level of 10780 is crucial and if that breaks then we could get to 10000 in quick time. Strategy would be to sell on rise
S&P500
The S&P500 seems to be breaking down which gives an indication that it could target 1050 in the coming week. Sell on rise.
Currency Markets
EURO/USD
As expected the pair tested 1.3867 last week and once the level broke it had a massive fall of more than 200 pips. Crucial support which is likely to hold is 1.3580. We could expect some pullback from those levels
But in the medium term the target is 1.3300. This clearly suggests that next few months risk aversion will be very high. Pullbacks are likely to be short lived.
GBP/USD
The pair is likely to hold support at 1.5750. We could expect some pullback from those levels.
Metals
Gold
The asset which is looking most bullish is likely to head to a new high by October. It is a buy on decline. The main target is $2000.
Indian Markets
Nifty
The level of 4950 is likely to hold for the time being and we could see a pullback to 5180 but the strategy is now sell on rise as Nifty is likely to see 4681 in a couple of weeks.
Happy Trading!!!
Savio
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