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Economic Data’s to Provide Guidance – Sept 3

September 3, 2013
Market is likely to resume its activity after yesterday’s Labour Day holiday in USA. Global sentiment is mildly Bullish after improved Chinese PMI data. Europe continued its upward journey, as economic conditions in Spain, France and Italy hinting that its manufacturing sector did well. UK’s PMI data released yesterday too was encouraging as manufacturing sector showed signs of growth, which means that the manufacturing data suggest that overall performance in the whole of European region has picked up.
Today’s interest rate decision by the Australian Central Bank, which is expected to remain unchanged, but the bias still remains towards rate cut. Statement that will be followed after the RBA interest rate decision will provide more clue about the next direction. Small gains that we have witnessed since Monday is based on hope that RBA will make no change, which should be short lived, as poor economic recovery will mount pressure on Aussie. This morning release of C/A data and Retail Sales does not bode well for the Australian economy. However, AUD is unlikely to fall sharply due to coming elections on September 7, which as per opinion may be won by the opposition party that is support aggressive reforms policy.
For the rest of the week market will concentrate on the release of economic data’s, some of them are quite important ones’ and will be watching Central Bank’s policy rate decision for guidance. Recent batch of release of positive economic data from Europe should give some relief to ECB. It is too early to celebrate, as Euro-zone is faced with numerous problems such as growth and unemployment and hence, European party could be short lived.

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GMT 2:46- GOLD @ $ 1392 = I am expecting gold to exhaust around $ 1395-97 levels, as break of $ 1403-05 will threaten for more gains. A fall below $ 1285-87 will encourage for a move close to $ 1380.
GMT 2:54 – EURO @ 1.3191 = Unless Euro moves beyond 1.3225-30 levels, upside could be be tough to crack. Break of 1.3155-60 will extend losses towards 1.3135-45 zones Or else, up move could see a test of 1.3260-70 zones.
GMT 3:04 – GBP @ 1.5553 = Little tricky as bias is on the upside, which means GBP will remain strong against Euro. However, I am expecting Cable to hold around 1.5510-20 for a test and break of 1.5585-90 zones for a possible up move towards 1.5615-25 levels. Else could test 1.5480-90.
GMT 3:09 – JPY @ 99.45 = Japanese currency may not surpass 99.80 levels to re-test 99 levels, but needs to break 98.85-90 levels for gain towards 98.60. However, more weakness will be possible once 100.10-20 surrenders.
GMT 3:13 – AUD @ 0.8985 = Aussie may struggle to move beyond 0.9015, as break of 0.8955 will encourage for a test of 0.8920-30 zones Or else 0.9045-50.
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