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The pair finally nudged through the 100 level overnight as the USD gained further ground on the back of some positive economic data. The yen will remain in focus ahead of the G20 summit this weekend where Finance Minister Aso is expected to announce a two-staged sales tax hike. This threatens to take some steam out of the recovery and might force the BoJ’s hand to act. The next level of resistance for USD/JPY is around 101.38.
The precious metal has struggled over the past few days as Syria concerns wane and tapering talk ramps up. US economic data has had a good run lately and many analysts feel this implies September tapering is on track. This has given the greenback some impetus and in turn made gold less attractive from an inflation point of view. With non-farm payrolls data due out later today we are bound to see further tapering repricing. The market is looking for a non-farm employment change of 178,000, with an unemployment rate of 7.4%. Near-term resistance for gold is in the 1380 region and support is around 1340.
The single currency came under significant pressure overnight after ECB President said the central bank considered cutting rates. It also made it clear that the ECB remains cautious about the recovery, and this was reflected in the ECB staff's broadly unchanged growth and inflation forecasts. EUR/USD dropped to a low of 1.311 and remains sidelined around that level. Most of the volatility for the pair is likely to come from the USD side of the equation. Any further greenback gains could see the pair head down towards 1.30 in the short term.
The gold miner will be looking to test $12.50 support in the short term as the precious metal struggles. Any further losses in gold could see NCM’s recent recovery come to a halt. However, should gold recover from these lows then NCM could be headed towards the $15 resistance in the short term.
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