Economic Events: (GMT)

Major Economic Reports due this week. Please refer to the daily reports for explaination and forecast

US Markets closed on Monday for Presidents Day Holiday

Feb. 21

00:30

 

AUD

 
 
 

Monetary Policy Meeting Minutes 

 

13:30

 

CAD

 
 
 

Core Retail Sales (MoM) 

Feb. 22

09:30

 

GBP

 
 
 

MPC Meeting Minutes 

 

15:00

 

USD

 
 
 

Existing Home Sales 

Feb. 23

09:00

 

EUR

 
 
 

German Ifo Business Climate Index 

 

13:30

 

USD

 
 
 

Initial Jobless Claims 

Feb. 24

07:00

 

EUR

 
 
 

German GDP (QoQ) 

 

09:30

 

GBP

 
 
 

GDP (QoQ) 

 

15:00

 

USD

 
 
 

New Home Sales 

Gold

Gold Weekly Fundamental Analysis February 20-24, 2012, Forecast

Historical

High:     1916.20

Low:      1321.10                        

Rule:

One of the simplest ways for traders or investors to take part of this intense gold up trend is to let price action be their guide. In taking a look at the daily chart of gold, we can see numerous price action strategies that occurred in the context of this trending market that nearly all worked out as great entry points. Notice in this chart below how accurate price action can be and the frequency with which it provides high probability entry signals. By no means are we suggesting traders should have or could have taken all of these entries. But when you combine such high probability entry strategies with a sound money management plan, including a profit taking strategy, it would be very hard too not profit consistently in strongly trending markets like we are currently seeing in gold.

Gold is a bull force to be reckoned with right now, when a market is in a strong trend there will naturally be many great entry points. Price action setups can provide a plethora of accurate and non-lagging entries into such trends.

  • Human discretion plays a big role in trading success, despite what internet marketers want you to believe, rigid trading robot and lagging indicator systems will never make you a consistently profitable trader. You need to get an education in price dynamics and naked price chart reading to develop your discretionary trading skills.
  • There is simply no need to cloud up your charts with lagging indicators when mastering a few simpleprice action setupsis much more accurate, effective, efficient, and stress free.
  • When fundamental AND technical forces are in alignment, as with the current situation in gold, price action traders have an extremely valuable opportunity because trading with price action allows for much more accurate entries than other methods as well as providing traders with a set and forget style of trading when used in combination with simple risk to reward scenarios.

Gold prices always rise when there is uncertainty in the global economy. In times of uncertainty, wealthy investors tend to run towards gold. Suppose, rumors are flying high about some event in the world and this is increasing the uncertainty in the financial markets. Gold prices are on the rise again. You now buy three gold contracts. By the end of the week, each contract is up by 100 points. You make a cool $3,000 when you sell the three contracts. This way, you complete your third trade in a series of four trades.

This completes the third trade in the series of four trades. Now, you are ready for the fourth trade. You watch the market. It is moving up again. You enter with four contracts this time. You wait for a few days and the market is up by 50 points. You sell all the four contracts and make a profit of $2,000. Your total profit in this series of four trades is $6,500. This profit you made in just a matter of few weeks which is not bad. After you complete a series of four trades, you remove the profit from your account. Now, you can start all over again with a new series of four trades. The first trade in this series of four trades will always be with one contract.

This is a very simple gold trading strategy that depends on pyramiding your position with a series of four trades and removing all the profit from your account at the end of these four trades. With practice, you will find this gold trading strategy very simple and easy to implement.

  • Gold reacts to uncertainity in the markets
  • A drop in major currencies can indicate a run into gold.
  • Remember investors tend to take profit from gold so watch for trading opportunties when investors are taking profits, not moving out of the markets.

Analysis and Recommendations:

Gold is trading on Sunday at 1725.45 down 3.65

Gold bounced around all week on risk appetite on news and rumors over Greece, ending the week flat but falling during weekend trading.

US markets are closed on Monday for the Presidents Day Holiday

Gold is forecast to stay in the 1715-1745.00 range until a final settlement with Greece is decided. 

Strength

  • Greek bailout and PSI deal looking more likely AGAIN, at least that's what markets think as Greek stocks rally 3.4% on week, European credit CDS narrower, European banks bounce and US stocks continue their march. Merkel and Monti assure the markets.
  • German ZEW investor confidence figure rises to best since April
  • Initial Jobless Claims fall to lowest since 2008 at 348k, well below estimates of 365k
  • Philly and NY manufacturers  surveys up but components mixed as headline #'s are not sum of parts
  • Housing starts continue to grow for multi-units (apt/condo)
  • NAHB home builder index up 4 pts, 3 pts better than expected and highest since May '07
  • India's wholesale inflation rises at slowest pace since Nov '09, leaves open room to cut rates
  • Australia central bank surprises with a hold on interest rates
  • UK announces new round of QE
  • Australia and NZ have positive economic reports
  • China reduces bank reserves
  • ECB deposit facility falls
  • Japanese exporters see some breathing room with weaker yen to lowest since July after BoJ embarks on even more QE

Weakness

  • Greek saga never ending, ECB wants special treatment old bond new bond swap
  • Euro zone GDP in Q4 contracts .3% q/o/q, although touch better than estimates of .4%
  • Portugal's unemployment rate rises to 14% in Q4 from 12.4%, the highest since at least '98
  • Singapore confirms Jan estimate of Q4 GDP contraction
  • Japanese economy shrinks more than expected in Q4, BoJ can't help itself with more QE
  • Chinese FDI in Jan falls .3%, 3rd month in a row of declines
  • US Jan Retail Sales ex auto's weaker than expected (but Dec revised up)
  • CPI rate of change a below estimate m/o/m, core rate rises to highest since Sept '08 y/o/y. Overall index at another record high.

Economic Highlights Feb 13-17 actual v. forecast

Feb. 14

 

JPY

 
 
 

Interest Rate Decision 

0.10%

 

0.10% 

 

0.10% 

 
 

 

 

JPY

 
 
 

BoJ Press Conference 

 

 
 
 
 
 
 

 

 

EUR

 
 
 

German ZEW Economic Sentiment 

5.4

 

-11.6 

 

-21.6 

 
 

 

 

GBP

 
 
 

BOE Inflation Letter 

 

 
 
 
 
 
 

 

 

USD

 
 
 

Core Retail Sales (MoM) 

0.7%

 

0.6% 

 

-0.5% 

 
 

 

 

USD

 
 
 

Retail Sales (MoM) 

0.4%

 

0.8% 

 

0.0% 

 
 

Feb. 15

 

EUR

 
 
 

German GDP (QoQ) 

-0.2%

 

-0.3% 

 

0.6% 

 
 

 

 

GBP

 
 
 

Claimant Count Change 

6.9K

 

3.2K 

 

1.9K 

 
 

 

 

GBP

 
 
 

BoE Inflation Report 

 

 
 
 
 
 
 

 

 

GBP

 
 
 

BoE Gov King Speaks 

 

 
 
 
 
 
 

 

 

USD

 
 
 

FOMC Meeting Minutes 

 

 
 
 
 
 
 

Feb. 16

 

USD

 
 
 

Initial Jobless Claims 

348K

 

364K 

 

361K 

 
 

 

 

USD

 
 
 

Fed Chairman Bernanke Speaks 

 

 
 
 
 
 
 

Feb. 17

 

GBP

 
 
 

Retail Sales (MoM) 

0.9%

 

-0.2% 

 

0.6% 

 
 

 

 

CAD

 
 
 

Core CPI (MoM) 

0.2%

 

0.1% 

 

-0.5% 

 
 

 

 

USD

 
 
 

Core CPI (MoM) 

0.2%

 

0.3% 

 

0.1% 

 
 

 

 

USD

 
 
 

CPI (MoM) 

0.2%

 

0.3% 

 

0.0% 

 
 

Sovereign Bond Auction Schedule

Feb 20-24 n/a  UK  0.375% 2062 I/L Gilt syndication

Feb 20  10:10  Norway  Nok 3bn 4.5% May 2019 DSL

Feb 20  10:10  Slovakia  Eur 0.15bn Apr 2014 & Eur 0.05bn Nov 2016 bonds

Feb 21  09:30  Spain  3 & 6M T-bill auction

Feb 21  15:30  UK  Details gilt auction on Mar 01

Feb 21  18:00  US  Auctions 2Y Notes

Feb 22  10:10  Sweden  Nominal bond auction

Feb 22  10:30  Germany  Eur 5.0bn Mar 2014 Schatz

Feb 22  16:30  Italy   Details CTZ/BTPei on Feb 24 & BOT on Feb 27

Feb 22  18:00  US  Auctions 5Y Notes

Feb 23  10:10  Sweden  Sek 0.75bn I/L bond auction

Feb 23  16:30  Italy   Details BTP/CCTeu on Feb 28

Feb 23  18:00  US  Auctions 7Y Notes

Feb 24  10:10  Italy   Auctions CTZ/BTP

Gold Pivot Points (Time Frame: 1 Day)

 

Name S3 S2 S1 Pivot R1 R2 R3

Classic
1695.77
1706.28
1714.67
1725.18
1733.57
1744.08
1752.47

Fibonacci
1706.28
1713.50
1717.96
1725.18
1732.40
1736.86
1744.08

Camarilla
1717.85
1719.59
1721.32
1725.18
1724.78
1726.52
1728.25

Woodie's
-
1705.75
1713.60
1724.65
1732.50
1743.55
-

DeMark's
-
-
1729.38
1723.09
1710.48
-
-