Yesterday’s fall of Euro in early New York session was caused by STOPS that was triggered @ 1.3190, but in real sense there was no other motivating factor that could give more life to the US Dollar. Euro bounced from 1.3172, as market players must have realized that news coming out from Euro zone is still setting positive tone.
Another factor that could have drove Euro up is because of China’s economic slowdown worry that may have cautioned investors from investing in AUD at least for the time being due to Australian economy’s linkage with Chinese economy. Australia major trading partner is China and Chinese economic slowdown is bad news for the Aussies.
Furthermore, market players are having cautious approach until UK budget which is due today. Hence Pound Sterling will continue to trade in narrow band till budget announcement.
However, it all does not change my view, as Euro will continue to trade in 80-100 pip range either way before correcting, as Euro does not have strong legs to make big 150-200 pip one way surge and will continue to pause, so strategy remains unchanged, pick bottom and top of the range.
My strategy for Gold is very similar to that of yesterday’s, sell on rise, as FED’s QE3 does not look a possibility in near term and India government threatening more curb on gold import if deficit does not come down and with slowdown in China, gold lovers will need some time to regain confidence.
EURO @ 1.3273 = Prefer selling Euro around 1.3295 for a dip and test of 1.3225-35 zones with STOPS if 1.3330 surrenders.
GBP @ 1.5887 = Prefer waiting to sell around 1.5910 with tight Stops around 1.5935, but quick profit taking and squaring of position preferred. May see volatility before budget
GOLD @ $ 1654 = Sell around $ 1655-58, STOPS is $ 1662 for $ 1645
March - 20 GoLD SofT – EurO CatcH BottoM or ToP