Mike Paterson’s Daily Forex Brief
We’ve seen continued buying of the Euro despite poor Eurozone data and anti-austerity protests across affected countries, and the Pound has been given a jolt by the BOE’s growth forecast and comments from Moody’s on AAA rating.
EURUSD has broken through resistance at 1.2740 and has so far been up to 1.2757 with assistance from a weakening Yen on the back of comments by the expected incoming Japanese PM that there is plenty of monetary easing still needed.
USDJPY is testing resistance at 0.8100 and EURJPY has flown from 102 to 103.22, and the seemingly Teflon-coated Euro has also made further gains against a weakening Aussie $ as AUDUSD falls back over 100 pips from yesterdays resistance area around 1.0450 on expectations of another interest rate cut and further talk of RBA sales.
And following yesterday’s reality check for the UK by BOE Governor King where he talked down growth prospects, and last night’s threat of an AAA down grade from ratings agency Moody’s if the UK doesn’t get its act together after the Autumn statement, GBPUSD has found itself pinned to the lower reaches of the recent range around key technical support at 1.5850.
Add that to the Euro’s gains elsewhere and we’ve seen a rise in EURGBP through resistance at 0.8020 and overnight in Asia through 0.8040 (GBPEUR down to 1.2437)after testing recent lows around 0.7970 (GBPEUR up to 1.2545) only a couple of days ago following the UK inflation data.. The BOE yesterday recognized its concerns over the rise in inflation but this does not seem to have offered the Pound much support despite there being less room for monetary easing.
The Pound has, however, made decent gains against the even more undermined Aussie and Rand and has climbed to 1.5317 and 14.2050 respectively in what remains a real mash-up of a market.
More data out today including UK Retail Sales shortly and Eurozone GDP later this morning and a plethora of US action this afternoon and evening so we should expect a lively day.
Interbank Rates at 08:38 BST
Today’s Data: BST
09.00-EU – ECB Monthly Report
09.30-UK – Retail Sales
10.00-EU – Eurozone Q3 GDP / Eurozone CPI
13.30-US – CPI
15.00-US – Philadelphia Fed Manufacturing Index
18.20-US – Fed Chairman Bernanke speaks
19.45-US – Fed’s Fisher speaks
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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.