The currency moves in thin market condition are always erratic, but on Monday Asian market opened with a huge gap in anticipation of another so called European reform through some kind of fund injection.
Euro got further boost on report coming from Greece that opinion polls is projecting lead for Greek Conservatives and New Democracy is ahead of the radical collation of left (Syriza). I was just wondering and doing my calculation that if this Greek opinion poll is good enough to give 100 pip strength to EURO.
But by the time Europe opened the bubble was pricked, as Spain bond showed 1st sign of uneasiness due to the misery caused to its banking system. The announcement of fund injection of Euro 19 billion could not come to the rescue of market despite appeal by the Spanish Prime Minister in his unannounced short news conference that Spain’s banking system is strong enough to meet all eventualities.
Market realized that they cannot be fooled with such statements, as estimate suggest that it’s banking system needs another Euro 50-billion injection for bank capitalization. The problem is that Spain’s banking system has already sucked in, over 300-billion LTRO money. So more funding may not be easy to come and now Spain is surly going to be the next big casualty.
Meanwhile, German CPI is an important economic data that that may provide further clues about the economic progress in European region. We may not see a break or test of 1.2445 levels unless further bad news emerges from Europe. Good data may provide another opportunity to bears to Pick the Top.
EURO @ 1.2526 = Euro will find top around 1.2560-75 until European opening and only break of 1.2595 would encourage for a test of 1.2625-30. However, 1.2480 is the key levels that should hold and break would encourage for a push toward 1.2445.
GBP @ 1.5660 = Cable has strong support around 1.5620 zones, which should hold for bounce back to test 1.5698, but clean break could extend the rally towards 1.5725-30 zones. Break of support level; could threaten to test 1.5575
GOLD @ $ 1574 = Gold is likely to find top around $ 1577-79 zones and should not move beyond $ 1583 for test of $ 1567-69. A break of $ 1565 would encourage for sharper fall towards $ 1559 probably towards $ 1548