Spanish bond was the key market focus that kept Euro under pressure. Market is once again worried about reemergence of Euro-zone debt crisis. Suffering of European bank stock added to the European trouble, as rising Italian bond yield further confirms the cause of investor’s nervousness. Portugal’s bond too is under pressure.
IMF statement on challenges faced by Spain to meet European Union target further nailed down traders mood that also helped in pushing the currency into negative territory.
I think if we take overall recent development of last week and this week, coming US economic data’s will play key role I determining the trend. With no sign of QE3 after the release of FOMC minutes, market will soon start discussing “Operation Twist”, which is the major coming event.
All data’s related to growth and job will be keenly watched for next two-months because any drop in unemployment rate and improving US growth rate could even mean end of “Operation Twist” to counter inflation. Therefore, for next 70-days, all US economic data coming out from USA will be keenly watched by the market watchers.
Thin trading activity is expected as major markets will remain close due to Good Friday. Today’s Non Farm Payroll and Unemployment data will provide further direction and more clues for next week’s trading. However, experience suggests that in thin market condition there could increase chances of market volatility.
Euro @= 1.3068 = Euro will struggle to move beyond 1.3110 with risk for a test of support level of 1.3005. Any up move should find a cap around 1.3150-70 zones. Break of support level may push Euro towards 1.2930 on break of 1.2970.
GBP @ = 1.5848 = There is strong buying interest for Cable, but there is no clear direction about its next move beyond 1.5895 unless resistance 1.5930 makes a clear break. Next level to watch is 1.5790, a clear break will push the currency to 1.5736
GOLD @ = $ 1629.90 = Today’s nonfarm pay roll and unemployment data could be key to gold’s next move. A good number could depress the bulls. Break of $ 1612 risk for a test of $ 1587. Test of $ 1545 could be possibility. On the upside Gold has strong resistance around $ 1644
GbP uP, GoLD tO CorrecT BeforE DowN - ApR 05