The was disappoint spilled all over the globe after the Chinese Purchasing managers Index (PMI) number dropped fearing another slowdown queuing up. Global equity market, gold got the hammering and oil market remained nervous. USD, Yen and US Treasuries were the beneficiaries. .
Europe gave a bad start with news from Portugal going on strike against austerity measures, EU demanding for larger firewall and later during the day economic news flashes coming from France, Germany and UK Europe was disappointing that helped in joining the bearish bandwagon.
Euro that initially had a strong tone during European opening was short lived. In my yesterday’s note I pointed out that Euro needs to break 1.3260 for further gains and it could not, hence the short rally fizzled on bad economic numbers.
Today, there are no major economic events in Europe, so market could trade in a narrow range until New York, as US New Home Sale Data will provide clearer picture of US economy.
This week, BIS reported Central Bank buying of GOLD after the selloff, which was witnessed soon after Bernanke’s statement was not enough to support the Yellow metal. Neither Global development that I have been pointing regularly in my notes is supportive for GOLD.
Hence, for the moment GOLD’s should continue with its downward journey and it may take some more time before the tone turns Bullish.
EURO @ 1.3205 = Euro may struggle to push beyond 1.3235 zones and any up move could be used as opportunity to sell the European currency, as long as it is unable to surpass 1.3255 convincingly. Euro has support around 1.3175, but 1.3135-40 remains key support area to watch.
GBP @ 1.5822 = Cable could still dip to test 1.5765-70 zones, but I will refrain from selling until 1.5750. Prefer buying on dips with STOPS 1.5730 for up move.
GOLD @ $ 1647.50 = Trend remains down, but would wait for small correction. Prefer to SELL around $ 1452-54 area and will apply Stops if $ 1659 surrenders for $ 1640 or $ 1633.
March 22 - BuY EurO & GbP, SeLL GoLD