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EuRoPe mAy AvOiD FiNaNciAl CoLLaPsE

November 22, 2012

GMT 15:49 – as I said in my earlier note that I will refrain from selling Yen beyond 82.70, which means that from now onwrds I will try to pick the top and buy Japanese currency. Yen is up on ABE’s wishful thinking, as there is no gurantee that he will win and even if he wins the election it is BOJ’s call. I think ABE by giving such statement is trying to take extra milage to seek votes……..Cheers
GMT 15:43 (CUST) – Sir, USD/JPY further upside move expected from the current level-82.45?
GMT 14:41 – I do not prefer trading due to thin condition. possibe range 1.2867-95
GMT 14:39 (Cust) – eur @1,2875, long for a new test of 1,29 and above?
GMT 14:23 – JPY @ 82.27 = book your profit….Cheers
GMT 14:20 – GBP @ 1.5933 = Book your profit around 1.5928-33
GMT 12:42 – GBP @ 1.6953 = likely to struggle around 1.5970-75 and should 1.5930-35 zones
GMT 12:40 – GOLD @ $ 1731 = Book your profit around $ 1731-33
GMT 12:34 – AUD @ 1.0378 = book your profit
GMT 12:33 – EURO @ 1.2889 = book your profit
GMT 10:25 – as AUD failed to break 1.0410, now am expecting Aud to trade in narrow range between 1.0340-1.0375 until we get some sort of news flash from Europen FM…..
GMT 10:19 (Customer) – aud is aproaching, 1,0349. level to buy, or wait for more losses?
GMT 8:25 – Yes, buying on dips is prefered, but thin market activity is expected beacuse NYK is closed. Delay in Greece announcement could put pressure on Currencies & Gold and USD could benefit from this situation. However, any news about understanding on Greece issue will see surge in Gold & Euro. So I would suggest to keep an eye on news flash…………Cheers
GMT 8:13 – (Customer) view in gold same buy at 1727 1728 if get for 1736

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GMT 3:17 – Euro @ 1.2844 – So far nothing is known about the Greece deal, but market is too confident that the Euro zone managers will soon conclude the deal. The pattern is too obvious as the poor Europeans has no other option/alternate to get rid of the financial mess, they are simply helpless to refuse bailout funds. Borrowers ridden with loads debt are better and comfortably placed and are in the driving seat, as they are well aware that their European bosses or donors cannot refuse bailout money, because refusal means beginning of collapse of European financial system. The desperation by Merkel, once again pleading to Bundestag to increase EFSF funding by another Euro 10 billion and getting good support its finance minister Wolfgang Schaeuble means this is almost done deal.
What has become obvious is that the only technique that is required from the negotiation team (borrowers/lenders) is to linger on talks and extend the maturity dates for next 10 to 30 years on cases to case basis. Since time is precious, the easiest formula is to buy time that can be followed with various types of juggling like new window dressing methods, changing the accounting rules and if required or necessary, obtain parliamentary approval that gives the legal right and ensures survival for few more years.
But this does not assure that surviving nations will have comfortable time in the days to come nor lending nation should expect that they will get their money back, because in first place austerity measures means more job losses and revenue shortfall. Hence, commitment to introduce reforms through austerity measures will never be met and therefore, will never be fulfilled, targets will not be met and new jobs opportunities will not be created, debt and deficit will not be reduced to the required level and revenue collection will not increase without increase in business activity or by not raising taxes.
Greece deal may provide breathing space for few more months, but next is Spain and it will be thron in the flesh that will soon be followed by Portugal, France and Italy. Financial world is yet not out of the woods nor is an mood to take measures probably aware of the consequences and repercussions. Such type of major bailout understanding amongst nations, low interest rate environment, liquidity injection through artificial means (money printing), will not reduce financial difficulties. Financial unrest, public protest and violence will occur more frequently unless genuine steps are taken and forced measures are taken by penalizing rich through heavy taxes.
Its going to be a quiet day and Euro should trade in narrow band, it is likely to find support around 1.2810-20 zones and until we here about the conclusion of Greece deal, top is around 1.2880-90 and any positive news will see Euro bulls celebrating with a possibility to test 1.30 zones. Risk to Euro will increase if 1.2770 surrenders.

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