Yesterday, Euro once again failed to make gains beyond after briefly hitting 1.3380 in early hours of European trading. While it was taking a breather after weak Euro-zone PMI, rumor of Bundesbank’s refusal to honor Greek, Portuguese and Irish bond, which was later denied by the German Central Bank caused more damage to the currency.
Later in US session, after mildly positive ISM data the European currency tested days low, but could not make further gains after testing the support level of 1.3280.
However, today again emphasis will be on European economic numbers, which is constantly on the weaker side. Quarterly GDP number may not upset the market, but today’s Producer Price Index is the data to watch.
Meanwhile, in almost after an hour time Reserve Bank of Australia (RBI) will announce its decision on interest rate. Market has developed a consensus that it does not expect a cut this time, but I will not be surprised to see a slash. AUD has gained on sentiment of no rate cut and no rate cut decision will give further boost to the Australian currency, which will be opportunity to sell Aussies, as market will soon realize the strength could be short lived due to weak economic condition.
Euro @ 1.3344 = I do not see much of change in the market behavior, as Euro should be bought around 1.3310-20 on dips, it should not fall below 1.3290 and has firm protection around 1.3265-70. A break of 1.3355 will encourage for 1.3390-95, where Euro has strong resistance.
GBP @ 1.0638 = Cable remains a buy around 1.6010 with STOPS at 1.5880, but I will not be comfortable with long around 1.6070-75, as the ongoing rally could soon fizzle out.
GOLD @ $ 1677,20= Trend is up, prefer buying on dips around $ 1674-65 with STOPS at $ 1670. Break of $ 1680 will pave way for $ 1684-85.
EurO –GbP & GoLD - BiaS on UpsidE ApR 2-6