Market has been waiting for two major developments, G-20 meeting in Mexico and German parliament decision on the Greek bailout issue. Whatever may be the outcome, but one thing is for sure that the Germans will have to continue to play lead role in this whole episode. This is what my conclusion is about the G-20 meeting.
They are well aware of the urgency and seemed willing to help Europe. Interestingly, the condition set by G-20 to support and add more IMF fund is a clear message to Germany that they will have to make bigger contribution in the European pool probably sensing that Merkel is having tough time with the Berlin administration, as French will be going for elections and other can contribute little to help the cause.
It seems that initially G-20’s message worked well despite opposition/criticism to get Merkel clearance from the parliament for Euro 130 billion Greek bailout packages. But the bigger test is yet to come as European Union leaders are meeting in Brussels for formal approval and may have to decide adding more money to obtain more IMF funding.
Size of LTRO will be another key factor that will keep market on its toes until it is announced. My hunch says that anything above EURO 400 billion could be taken positively. Less could be bad news for Italian and Spanish bonds.
So market to remain choppy as uncertainty prevails.
EURO @ 1.3412= The cat and mouse game of buying the currency at bottom of the chart and selling at the top to continue. Market moves will largely depend on news/rumors. I believe that market for now will be watching two major levels that are 1.3320 and 1.3490. Prefer to buy Euro around 1.3380 and Sell Euro around 1.3440
GBP @ 1.5830 = Prefer buying on dips around 1.5612-18 for 1.5875-80 with Stops 1.5780
GOLD @ $ 1769.02 = Buying on dips is still preferred, with quick profit taking suggested. Do not jump in the middle of the range as, Gold does not have one sided direction would continue to move both ways, but buying interest to dominate. Buying around $ 1760-62 is preferred as Selling around $ 1774-75 may not be bad idea as long as $ 1779 holds.
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Feb 27 - EurO & GoLD to MakE MorE GainS