The Fed has no problem in keeping the QE at 85$B monthly
The Fed has signaled yesterday that there are less worries about keeping the QE on with no cutting of it amid benign inflation pressure with its yearly rate is still below 2.5% which can push the fed forward to start cutting it and also with the unemployment rate is still well above the 6.5% which it is still repeating as a target of it with no revision.
The statement briefly gives a leeway for the greenback to get down across the broad with the fed interest in pressing further on the mortgage rates and the treasuries yields and from another side, it gives the investors an excuse to sell the greenback favoring taking risks.
The gold as a precious metal can get a higher place as long as this sentiment can persist in the markets and generally the commodities can also as long as The Fed spurring investment efforts for getting the economic activities growing up faster are still on.
God willing, we will be waiting by the end of this week the US Labor report of July as the first clue of the next Fed’s meeting in September and the weak data can cause renewed pressure on the greenback while getting down further with the unemployment rate can push it up.
We have also today an ECB meeting and it is expected to press on the need on the quicker growth and it may hint again about the possibility of more easing actions to come after its recent forwarded reference which put weights on the single currency previously but more than that from the ECB can cause problems to the single currency specially with the EU unemployment rate above 12% and HICP below 2% yearly.
BOE will be ready also to give more about its monetary policy with the second meeting of Mark Carney as a chief of it and the market has actually started to push the British pound down before it with his new mode of representing texts sending out signals about its current assessment and future expectations directly after it increasing the volatility of the cable in the forex market.
The gold breaking above 1300$ Since the beginning of last week is still supporting it technically and it has kept this solid shape this week too with let below this psychological giving it’s the look of a support after it had been a resistance before and the persisting of this case can open the door for surpassing more resisting levels and there can be started by 1348$ again then 1375$ before another strong one at 1423$ which can be followed by 1476$ before 1487$ whereas the highest level and the formed lower high it has managed to fall from again after having a previous bottom at 1321$ to start falling down again and one a continuation of this falling down the gold can meet supporting level at the psychological level at 1300$ and the breaking of it can be met by another supporting level at 1267$ then 1242$ before 1207$ which can be followed by its formed bottom which could bounce from at 1180$ on 28th of last June.
Kind Regards
FX Market Strategist
Walid Salah El Din
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