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European stability could be short lived – Feb 06

February 6, 2013

GMT 3:30 – EURO @ 1.3574 = We did see uncertainty caused by political unrest in Spain that happened to be short lived, but since there is no fresh news in the making, market seemed to have regained some of its lost confidence. European market that suffered most did get the breather after the release of European PMI numbers that though not up to the mark due to weakness in France, Spain and Italy that did not help to surpass 50, a level considered as a benchmark for good economic performance, but was still good enough to prove that private activity is improving, specially in Germany. Euro that got clobbered a day earlier on reports published by a Spanish newspaper that its Peoples Party government is involved in corruption scandal made some recovery as Spanish PM Rajoy is expected to provide his tax details to prove allegation against him is wrong. This to some extent helped Spanish bond yield from rising further and Euro recovered. But Euro got the real boost from French President Hollande speech to EU Lawmaker that Euro shouldn’t be left to fluctuate according to market’s mood and demanded from European foreign exchange rate policy makers to protect its currency from “irrational movements”. Today, since there is no major economic event, market may trade in range, but will surely make another upside attempt. Any news pertaining to Spanish government will definitely have impact in the market, depending on the type of news flash. So be on your toes. Euro @ 1.3574 = Buy Euro on dip around 1.3550 for test of 1.3010-20 zones, apply STOPS if 1.3520 surrenders

GMT 3:38 – GBP @ 1.5655 = I am expecting 1.5630-35 to hold until mid-European session and 1.5610 should not surrender for, but barrier is around 1.5675-85 that is required to be cleared for more gains or else 1.5570

GMT 3:47 – AUD @ 1.0352 = I see strong support around 1.3030-40 and should not surrender for a move back to test 1.0375-85 zones or else 1.0305 before up again

GMT 3:53 – JPY @ 93.77 = As long as 93.35-40 holds, Yen should further weaken, next barrier is around 94.20-30 zones on break of 93.95

GMT 4:04 – GOLD @ $ 1673 = Gold is buy on dip around $ 1669-71 zones for $ 1678-80, break of $ 1665 risk for $ 1660. However, if move beyond $ 1682 is seen selling is preferred on the rise because as long as $ 1690-92 levels hold. Gold will make sharp down move from the highs.

 

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