Greece may have overcome another major milestone by successfully ending up with the debt swap deal with its private creditors that will help them to reduce their debt burden that allows Greece to receive 2nd official bailout package. For Private Investors (PSI) the value of old bond has been reduced to 53.5 pct, which they will swap with new bond. The result announcement is expected today at 0600 GMT.
Initially the conclusion of this deal will give further boost to the European financial market, but market will soon start talking of IMF demand for placing European firewall i.e., EURO 500 billion European Stability Mechanism (ESM) to obtain fresh funding.
In another development ECB Chief Mario Draghi said that they did not discuss lowering of interest rate or another LTRO, but lowers European growth prospects and hikes inflation number due to higher oil price, which is understandable. So for now no one will talk on these two subjects.
Overall, this could be positive development, as we can see small shift in market sentiment, but there are many more hurdles to come, so time will tell us that if this is sustainable for sometime or will be short lived. But I will remain cautious and will be watching every move carefully.
GOLD $ 1705 = Gold is likely to continue its upward journey. During Asian session Gold should find top around $ 1712-15. I prefer to wait buy on dips around $ 1698-00 zones, as next resistance level is $ 1728. Support level of $ 1688-90 should not surrender for continuation of up move
EURO @ 1.3263 = Buying of Euro is preferred around 1.3245-50 with STOPS 1.3210. Break of 1.3295 will encourage for 1.3325. However, EURO needs to clear 1.3380. Failing to break could lead to another correction.
GBP @ 1.5818 = Buying of cable is preferred around 1.5790’s zone, with STOP LOSS if 1.5760 surrenders. A break 1.5845 is required for a test of 1.5870-75 levels.
March 08- GoLD BottomeD OuT– EurO & GbP BiaS UpwarD