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Currencies & Gold Outlook – Aug 13

August 13, 2013
Traders could not find enough reason to move the market, as it happened to be another dull Monday session in the absence of any major economic data announcement. Though today, it is going to be an active day in terms of economic data release, but all eyes will be on the US Retail sales number for further guidance.
In Europe, focus will remain on economic data release, specially German ZEW is expected to show signs of improvement after recent economic gains. Release of Euro-zone’s Industrial production data and ZEW survey too will provide guidance towards regions monetary policy.
Meanwhile, slow growth in Japan may cause delay in hiking sales tax, which is topping market talk agenda. Slow economic recovery also demands BOJ to reconsider more stimulus package, as implementing tax reform at this stage looks inappropriate. I think the importance of sale tax discussion at this point is a clash between more stimulus or implementation of tax reforms as both generates funding. The difference is that sales tax will benefit Japan’s debt ridden economy, as the size of debt has grown to 223 pct of the GDP, which is the largest in the world, whereas, stimulus means adding liquidity, but more burden for the economy.
GMT 2:52  – EURO @ 1.3305 = I a expecting 1.3250-60 levels to hold, but Euro needs to break 1.3335-40 levels for a test of 1.3370-75 zones or else another test of 1.3280 is possible, break risk for deeper fall towards 1.3195 on break of 1.3250.
GMT 2:59 – GBP @ 1.5460 = Cable should find support around 1.5430-40 zones, but needs to break 1.5490-95 levels for a test of 1.5515-20 zones, break will encourage for 1.5540 or else 1.5410.
GMT 3:06 – JPY 97.22 = Japanese currency may find resistance to move beyond 96.80-90 zones and could test 97.60, as 97.890 is the crucial level that needs to break for more losses or else test of 96.50-60 levels.
GMT 3:11 – AUD @ 0.9128 = Upside move beyond 0.9150-70 does not look every encouraging, as I will not be surprised to see selling interest on the rise, break of 0.91 risk for test of 0.9070-80 zones.
GMT 3:19  – GOLD @ $ 1334 = Should hold around $ 1337-40 levels for a test of $ 1325 zones. Failing to break below $ 1318-20 risk for another up move, break of $ 1348, would risk for possible test of $ 1366.
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