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Warning shot for European Deposit Holders – You could be Next ! March 26

March 26, 2013
 
Cyprus still has long way to go, banks are yet to open, banks in Cyprus require re-structuring, they need  to discuss capital control, fate of deposit above Euro 100.000 is unknown, as it is faced with risk of being taxed. With plenty of negative happenings in Europe, deteriorating economic data is further adding to the woes. 
It is not going to be over soon as the message is not very enlightening, it is a sort of warning short to all the depositors in the Euro-zone trouble countries that if and when necessary their money could be used through various methods. I would like to remind that this is not a new practice, earlier last year during Greece bailout, Greek bond holder had to face haircut so the trend suggest that that bond holders and depositor both could come across similar situation in future, specially investments in trouble countries.  Though the deal is structured in such a way that it avoided Cyprus legislators, but it will be interesting to see German Parliament’s behavior, which is required to give a nod to conclude this deal.    
Therefore, I will not be surprised to see money flying to safer economies and some of the beneficiary would be Australia, Canada, Sweden, UK and New Zealand. While demand for GOLD and US bonds could be on the rise. But Italian and Spanish bond holders may consider profit taking.  
Meanwhile, durable goods order, home sales and consumer confidence are some of the important US economic data that will be announced today that could give some more spark to the market.
 
GMT 3:12 – GBP @ 1.5176 = Ideally would sell around 1.5215-20 if seen, as only break of 1.5250-60 could push it towards 1.5290. On the downside break of 1.5145 will help for deeper fall towards 1.5110.
GMT 3:17 – JPY @ 94.27 = Yen has protection around 94.80-90 levels and may not fall below 94.50 as Japanese currency could continue its advance towards 93.70-80 zones or 93.40.
GMT 3:21 – AUD @ 1.0451 = AUD may take small dip but has support around 1.0420-30 and likely to make another attempt towards 1.0480-90 levels or else 1.0390.
GMT 3:23 – GOLD @ $ 1601.50 = Failure to break above $ 1606 risk for a fall and needs to break $ 1596 for $ 1592. Or else $ 1610-12 will be crucial level to watch.
GMT 3:07 – EURO @ 1.2867  = Euro may may hold around 1.28 zones for correction, but on the upside has strong resistance around 1.2920-40 levels and failure to break would see another dip, losses could extend up to 1.2765 
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