Strong Volatility in the departure of 2013

Author BuzzInForex

And now attention to the debt ceiling

After the fear for the fiscal cliff the U.S. are now facing to a new political battle related to the debt ceiling. The increase in the maximum level of public debt will be necessary to avoid the default of the United States and this should be of benefit to XAUUSD, historically correlated to the amount of U.S. debt. The only noteworthy macroeconomic data in the coming week will be those related to the U.S. trade balance. Considering our medium term bullish view, the return of EurUsd close to the support of area 1.30 provides us the opportunity to enter long on the cross with target 1.349 (see graph 1)

Trade: long EurUsd at 1.30 stop 1.27

The starting of the electoral year in Europe

While 2012 has been the year in which the ECB has managed to take time, 2013 will be the year of the policy responses from Italy and Germany. In Italy there the political elections will be held in February, while in Germany the election date is scheduled for the autumn. Meanwhile, the ECB meeting is scheduled on January 10th at the same time with the one of the Bank of England.

The most awaited event might be the trend of the Pound. EURGBP historically experiences a very bad first month of the year with an unfavorable seasonality on 9 of the last 10 years. And anyway, a phase of pressure on the supports of area 0.80 for EURGBP is predictable on January, also to cover the difference of the spread between 2 years German and English yields. As we can see from the chart the GER-UK 2 years spread has fallen from September, while EURGBP has risen, a sign that the EURGBP rally of the past few weeks was not reliable.

Focus on the macro data of January 8th to the German factory orders and business confidence in the Euro area.

EURGBP - black level, GDBR2 Index - Red level

Nobody wants to buy JPY anymore?

Japanese elections have strengthened the weakening of JPY formalizing an evident bullish head and shoulder on UsdJpy with theoretical target at 92. Anyway, the rise is not always a straight line and the Adx has now reached a record level at 60, already registered in March 2012 with an overbought above 80 (RSI). Besides, the Cot analysis indicates a remarkable excess of pessimism about Jpy that might lead to a cooling of the rise. Based on these considerations and as the data on the current account deficit of November will be published on January 11th,we will strengthen the short position on UsdJpy at 88 to catch the expected retracement, but also closing the short operation NZDJPY in stop to keep the exposure on the Japanese currency unchanged.

Trade: short UsdJpy at 88 stop 93

Other Macro econimic world data

There are not so many macroeconomics data on next week.
Australia: January 8th deficit trade, January 9th, retail sales, January 10th building permits
China: Inflation January 11th
South Africa: Industrial Production January 10th
Turkey: Industrial production January 8th
Norway: Industrial Production January 8th, inflation January 10th
Sweden: Industrial Production and Inflation January 10th
Mexico: Industrial Production and Inflation January 11th
Czech Republic: Inflation and Unemployment January 9th.

Last Trades - Comment

Gold has kept on falling due to the rise of the American real interest rates. However, for the above mentioned reasons, we still keep the exposure as long. EurTry has not continued its bullish trend that started with the neck line break of 2.35. We suggest to remain long until the signal will not be denied under 2.30.

2013-01-07 07:10:38