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EURO – JPY & GOLD to Show Strength – May 09

May 9, 2013

In the absence of any major economic data, market was looking for reason to trade actively. German industrial production for the month of March was surprisingly up against expectation that gave confidence to the market, as Germany’s economic data announcement always have larger impact on the market due to its share size in the European economy. 

It was the German press report that gave lift to the market in real sense, which said that ECB is considering to buy bad loan from some of the European banks located in the South that will help in releasing the pressure on banks faced with Capitalization issue. I have frequently said that this is not an easy task as it requires permission/legislation from 17-member counties that uses EURO, but this is how market behaves on news.

Today, should be an active day as couple of important data’s have been released from Australia and China that will be followed by release of data from Europe and USA. Australian economy is showing some strength and Chinese inflation numbers have pushed up after yesterday’s higher trade surplus, which is encouraging for Aussie, gold and comforting factor for larger economies to some extent.

In Europe, market will focus towards UK for BOE decision on interest rates, which is likely to remain unchanged, as recently UK economic data has shown signs of minor recovery and should allow some breathing space. However, today’s release of UK manufacturing data, which will be announced 2 1/2 hours earlier than MPS announcement could give some life to Pound Sterling is the data indicated improvement in the manufacturing sector.

Catch me on twitter        @asadcmka          More Later……………

 

GMT 3:21 – GOLD @ $ 1472.40 = Gold is likely to hold above $ 1663-64 levels and should be bought around $ 1468-70. A break of $ 1477-79 will encourage for a test of $ 1483 Or else $ 1458.
GMT 3:27 – GBP @ 1.5540 = As long as 1.5510 survives could test 1.5570. However, upside break of 1.5588 will challenge 1.5625 and break would risk for a test of 1.5660. On the downside support is around 1.5470-80.  
GMT 3:31- JPY @  98.85 = Japanese currency will remain strong and should be capped around 99 levels for 98.40, break will see a push towards 98.05-10 levels. or else 99.30-35.
GMT 3:35 – AUD @ 1.0245 = Prior to rate cut, I have been warning not to sell below 1.0150 levels as Aussie will bounce back as it has the interest rate differential advantage. Should hold above 1.0210 for a test of 1.2080-00 or else 1.0170-80 before up again.
GMT 3:11 – EURO @ 1.3163 = Euro may attempt to get closer to to before falling. the level to watch is 1.3110 that should hold and may bounce back from 1.3135-40 levels. A break of 1.3195 is required to enter 1.3215-20 zones or else 1.3075.

 

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