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Finally Axe to fall on Russians – EURO Sell High, GOLD Buy Low – March 19

March 19, 2013

GMT 3:14 – EURO @ 1.2960 =  What I can make out from the delay in reaching agreement on “Yes Vote” by the Cypriot Parliament could be the levy rate bracket, as from parliamentarians point of view to treat all depositors equally may not be fair because majority of the deposits of under Euro 100.000 would be hard earned money belonging to the locals and in percentage terms the gap between Cypriot depositors and the foreign depositors (mostly Russian) would be huge in favour of local depositors.
It is estimated that roughly around 50 pct of the deposit money are owned by the Russians, which should be comparatively very small in in terms of number of depositors though large in size of individual deposits. This is one of the major cause of delay, as the government is considering to reduce the tax money on deposit of under Euro 100.000 and simultaneously raise the tax money on deposits of higher amount based on certain formula, which could mean that high bracket depositors will be treated differently in the levy and hence, they may have to pay more than 10 pct agreed earlier by the Euro-group to meet the shortfall.
Bottom line is that to obtain Euro 10-billion loan Parliament will have to vote for a tax cut that should generate Euro 5.8 billion and the axe will surely fall on the foreigners and they are Russians in majority. Russian President Valdmir Putin had already made a comment and has said that levy is unfair.   
I think unless voting takes place, market will remain confused. Any delay would mean that there is a disagreement and refusal could mean more damage to the Euro region. Vote by Cypriot Parliament does not guarantee stable condition. While there are load of economic data’s due to be released today. Strategy would be to pick the top to sell Euro and buy Gold on dips.

EURO @ 1.2960 = There is a big risk of choppy trading condition. Excessive volatility is a possibility. So Stops should be applied on all position taking. I would prefer to sell around 1.2990-00 zones with Stops 1.3050. If there is further rise next level to watch would be 1.3150. However, see risk for a fall needs to push below 1.2010 for 1.2880, but break of 1.2820 could be very threatening.
GMT 3:32 – GBP @ 1.5102 = Likely to trade in a 100 pip range with support around 1.5070-80 for 1.5180. A move beyond 1.5220 is required for bigger gains, but 1.5030 is the key level on the downside. 
GMT 3:40 -AUD @ 1.0381 = Aussie has strong support around 1.0340 levels and its upside momentum would continue. Needs to break 1.0425 for test of 1.0450-60 levels or else 1.0305.
GMT 3:44 – JPY @ 95.65 = Needs to push beyond 95.95-00 for test of 96.25 before down again, which ios not a favoured move. Rather see risk for a break of 95.40 for a drop towards 94.05 zones
GMT 3:49 – GOLD @ $ 1605.50 = Gold should find support around $ 1598-00, probably it should hold above $ 1600 level, but needs to push beyond $ 1608-10 for test of $ 1614 zones. Or esle $ 1592-94 

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