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Another Choppy Day Ahead – Gold to Suffer – July 3

July 3, 2013

The problem with European financial system is that it has so many branches and all of them are infected with diseases, which is not curable at one go. It is a long list, this is why it keeps on popping out so frequently. Last week, there was some noise about Cyprus facing hard times due to financial difficulties, this week we have heard warning shots coming from Germany’s Angela Merkal asking Greece to fulfil its bailout commitment to obtain next aid payment.
But at the moment resignation by Portuguese politician is adding to the European pressure. This is not all, credit rating agency S&P lowered ratings of 3-major European banks as regions banking system is already faced with unresolved Capitalization issue that has/will increase pressure on European stocks and currency. It seems that Mr. Draghi after tomorrows monetary policy announcement may once again have to go back foot and talk a lot to defend Euro zones overall performance.
While, there is Markit Service PMI data’s due to be released from Europe that may reflect improved labour condition in the region that should provide further evidence about economic performance in the region and could help to halt Euro slide until release of US data. Release of US economic  numbers ADP employment change, Initial Jobless Claims, Trade Balance and ISM non-manufacturing will be the trend setter for US payroll data that should spark additional moves later in the day. We could be heading for another choppy day.

Twitter for Currencies & Gold  Updates   @asadcmka
GMT 2:48 – EURO @ 1.2971 =   There is a possibility that in 2-sessions Euro may hold above 1.2945-50 levels for small up move, but I do not see a fall stretching below support levels of 1.2920 in Europe. However, I neither see upside beyond 1.3015-20 zones until batch of data’s is released from NYK. Only weak US data may help Euro to climb towards 1.3080. But do keep in mind that break of support level could see falll extending  towards 1.2865.
GMT 2:55 – GBP @ 1.5152 = Cable has support around 1.5110 that should hold, but needs to break 1.5195 for test of 1.5225, which may not be easy during European session. Break of support level will extend fall towards 1.5080.
GMT 3:01  – JPY @ 100.54 = May struggle to surpass day’s high comfortably that could increase risk for correction and break of 100.30 will encourage for a test of 100.15. However, move beyond 101.20 could see more losses for Japanese currency.
GMT 3:07 – AUD @ 0.9102 = Aussie has softer tone, but failure to break below 0.9080-90 levels may allow some space to correct for 0.9170-80. If breaks the only 0.9240 would be possible. Or else 0.9025.
GMT 3:17 – GOLD @ $ 1246 = Saw a fine hit of my target $ 1267 before easing probably attaining the highs. Today, Gold beyond $ 1250 is a suspect until NYK, unless move beyond $ 1255. See risk for extending on break of $ 1235 fro $ 1211. On the up is $ 1268-70.  
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