Market will remain choppy and undecided about the trend unless there is clear view about the outcome of Greece meeting. The key to Euro’s next major up move largely depends on announcement of agreement between Greece negotiators and the private creditors. Otherwise Greece will not be able to avail bailout package facility that it requires to meet its March bond maturity.
While, market is also keen to know the developments in Belgium. Representatives of 27 European member states are meeting to sort out Euro-zone issues. They are trying to sort out their problem and calm the market by signing treaties on fiscal responsibility pact. Major EU countries want commitment for more accountability and transparency on fiscal issues. They also want to ensure that European Stability Mechanism (ESM) fund of EURO 500 billion should be made available by July.
It may sound very good to ears, but many issues still remain unresolved. The problem faced by the EU nations is that it is not possible for 27 European states to be signatory or party to every treaty. UK is already in disagreement and not keen to sign Fiscal responsibility pact.
Debt burden countries have no choice and have to sign the treaty to avail the funding facility. Meetings, follow up meetings will continue to happen, as there are many issues that would continue to haunt Europe and cannot be resolved at one go. This is an ongoing process that will take years to be resolved and still could get from bad to worse.
Today, investors/traders will focus on economic data, as Europe will be busy releasing quite a few economic numbers that will be followed by North America. All eyes will on news flash coming out of Belgium, which may not be very exciting and may not have big impact on the market because huge amount of CASH is the only answer to all the problems.
EURO @ 1.3179….Today’s closing above 1.3240 would be the key for Euro’s next direction. However, USD could come under mild selling pressure and Euro is good buy around 1.3140 as it could test 1.3235-50 zones. Only dip below 1.3105 may push Euro to 1.3068 or else 1.3290.
GBP @ 1.5737…Cable is on up move and looks a good buy around 1.5690 for 1.5777. A move beyond 1.5835 should not occur, which is bullish for Pound Sterling. Watch 1.5640 on the downside, which could slow down the pace of this rally.
JPY @ 77.28…I stick to my last night’s view that that Yen will not hit my weekly target 76.02 until 76.12 surrenders, we may see Yen easing a bit, as I am looking for a test 77.43. A break of 77.60 will push Yen to neutral zone, or else 75.90.
CHF @ 0.9142….SFR buyer will jump around 0.9180 as test of 0.9070 is good possibility or else 0.9225
GOLD @ 1735…As long as Gold stays above $ 1724, buy on dip. It will test $ 1743 or $ 1750. Break of $ 1718 delays the move.
Jan 30 - Fx & Gold Weekly OutLook Jan 30- Feb 03