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BaD uS DaTa tO pUt PrSsUre fOr QuiCk FiScaL UnDeRStAnDinG

November 29, 2012

GMT 3:24 – EURO @ 1.2954 = After initially concentrating on developments in the Euro-zone region during the week, today market focus could shift towards release of barrage of US economic data’s. Jobless claim should dip by 5 to 8 pct after higher claims last week caused by Hurricane Sandy will be discounted, any deviation in number by larger percentage could have impact accordingly. This will be followed by annualized GDP data that could have larger impact on the market, as it will indicate the pace of economic growth and change in price of goods and services that helps ion determining the monetary value. Expectations are high as market is expecting improved data and hence, surprised bad number could thrash US Dollar
However, FED’s beige book is suggesting slowdown in the manufacturing sector that negates surge in Durable goods and industrial output. Out of 12-Fed region seven of there are reporting contracting of factory activity and 5 of them blaming fiscal cliff as one of the major cause.
Hence any delay in reaching an understanding on US fiscal matter support FEDs monthly purchase of USD 40 billion mortgage backed security QE plan and US Central Bank will become more determine and aggressive specially after Obama’s election win as huge liquidity injection will be required as FED is aware of the economic consequences and that it cannot afford further deterioration.
Market may opt for wait and see approach until the announcement of US economic data. Prior to that Euro-zones economic data will be released, but I m expecting thin activity until US market opens ranging between 1.2935-85. However, key levels to watch will be 1.3010,.Break will see a push towards 1.3070-80. On the downside fall below 1.2905 suggest test of 1.2850-60 zones.
GMT 3:33 – GOLD @ $ 1720.80 = Sell around $ 1723-25 levels, apply STOPS is $ 1728 breaks for $ 1715-16 or $ 1713
GMT 3:31 – AUD @ 1.0461 = Prior to US data 1.4075-85 should be good level to sell, as break adove 1.0505 looks difficult, but profit taking around 1.0430-35 is prefered
GMT 3:29 – JPY 82.06 = Do not see move beyond 82.25-30 level for 81.75-80, but needs to push below 81.65-70 for 81.50. Keep an eye on 82.60
GMT 3:26 – GBP @ 1.6015 = Sell around 1.6025-30 STOPS 1.6055 for 30-40 pip profit

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