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European Uncertainty to Loom – March 27

March 27, 2013
Closure of banks in Cyprus is still a worrying factor, as market fear bank run and they would like to wait to see the over all impact. The continuing delay is a big cause of concern hinting uneasiness in Euro-zone region. There are unresolved and unknown issues like haircut to be taken by the depositors, bank capitalization, restructuring or how much money will be allowed to withdrawal at one go or will the protest end.
Meanwhile, yesterday’s US economic data was enough to give boost to the ongoing Bullish view and was rather disappointing, as home sale dropped and confidence level was low. Durable good order surged as per expectation, I did mention in my weekly outlook report that data will show improvement due to possible higher sale of aircraft and automobiles.
While BOJ talking continues, as its new Governor Kuroda showed some optimism, he thinks that weak Yen policy has started to respond, as he sees signs of recovery, but cautioned that lot of hard work may be required that means deflation could still be a big worrying factor and wanting Yen to remain weak, so let us see that if BOJ act in its next weeks monetary policy announcement.
 GMT 2:50 –  EURO @ 1.2854 = As long as 1.2880-90 holds the tilt is still on the downside, but needs to fall below 1.2805 for 1.2750. Failure to break below could mean range play, but break above 1.2898 could risk for test of 1.2940.
GMT 2:54 – GBP @ 1.5160 = See strong resistance around 1.5180 zones, only break will encourage for 1.5210. However, see risk for a drop, but unless breaks below 1.5110 more dip towards 1.5070 will not be possible.
GMT 2:58 – JPY @ 94.74 = Break of 94.85-90 is required for a test of 95.10-15 zones. But the Japanese currency should resist around 94.40-50 zones.
GMT 3:02 – AUD @ 1.0467 = Likely to remain in narrow range unless break above 1.0490-95 or 1.0420.
GMT 3:07 – GOLD @  $ 1598.50 = All indicators are pointing towards fall so should hold below $ 1606. Break of $ 1594 is required for a test of $ 1588-90 zones. But do keep an eye on Cyprus news, worsening condition could provide temporary support o gold.
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