Mike Paterson’s Daily Forex Brief
Sovereign names and hedge-funds continue to buy more than a few Euros as the US budget talks continue and, now it seems, with decisions needed by Dec 21st not 1st Jan as first thought.
This fear of an imminent “fiscal cliff” is taking its toll on markets but in slo-mo as if Xmas can’t come fast enough for traders who’ve spent all year trying to make sense of the nonsensical.
EURUSD has inched its way up to 1.3125 where I mentioned yesterday that sellers were lined up ahead of a major option trade kicking in at 1.3150. We’ve fallen back a tad but the buyers are never far away and we’re back to 1.3112 as I type.
EURCHF still has its buyers too as has EURJPY with USDJPY having another run to the topside and we’ve seen EURGBP break up through resistance levels to so far cap at 0.8148 (GBPEUR down to 1.2270) as GBPUSD struggles to keep pace. Support now expected at 0.8120 (1.2315 resistance) with sellers between 0.8150-60 (1.2255 support).
The Pound overall is looking a little soggy as markets await today’s Autumn Statement from UK Chancellor Osborne (12.30) and his admission that his plans are somewhat behind the curve, whilst no doubt blaming everyone else apart from himself. Expect downgrades for growth (shock) from the Office for Budget Responsibility alongside a re-shuffling of the deck in a bid to please party and public alike.
GBPUSD is struggling to make headway above 1.6100 and this is having a knock-on effect elsewhere but, as I said, it’s all painfully slow right now.
Various bits of data out today which hopefully will give traders more of a clue but we shouldn’t hold our breath.
Neither should us cricket fans but England have got off to a solid start in the 3rd Test in India, with Monty toiling away again in fine fashion on a far less helpful pitch. India won the toss and have Tendulkar at the crease having just passed 75 out of a total of 230-5. A couple more wickets today will put the visitors in a strong position. There, I’ve put the mockers on it, but either way it’s England’s day so far.
Stop Press: UK Services PMI comes in lower than expected at 50.2 but Anderson bags Tendulkar with the help of a fine Prior catch to give our boys a look at the tail before stumps… Hurrah!
Interbank Rates at 08:38 BST
Today’s Data: BST
09.30-UK – Services PMI
10.00-EU – Eurozone Retail Sales
13.15-US – ADP Non Farm Employment Change
13.30-US – Non Farm Productivity / Unit Labour Costs
15.00-US – Factory Orders
00.30-AU – Australian Unemployment
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Mike ‘Oscar’ Paterson has been in the Forex trenches for nearly three decades working as a senior Spot trader in London at UBS, Chief Dealer FX at the State Bank of Victoria and in charge of Spot CHF at Credit Suisse with a daily turnover in excess of $1.5 billion. Mike now works as an independent consultant providing a fully bespoke service to the corporate and private sectors in physical FX delivery as well as guiding those who wish to improve their currency trading. Mike also presents seminars and workshops and writes for a number of publications.
To contact Mike please call +0044 (0) 1732 700383 or email email@example.com
The views expressed above are those of the author and should not be taken as investment advice. MSP Foreign Exchange Services will have no liability for, or to, any persons executing trades based on the content above.