Mike Paterson’s Daily Forex Brief
It’s been Euro strength all the way in January and there seems no end to that just yet as month-end approaches.
True, EURUSD has still to break up through key resistance at 1.3500 and 1.3550 but the dips are consistently bought helped along by the continuing weakness in the Pound, Yen and Swiss Franc.
Currently trading at 1.3453, 0.8555, 121.80 and 1.2435 respectively we may be off the recent highs but there’s still plenty of buyers on any retracement as traders and investors give the Euro some respite after a couple of years of Eurozone blues.
Whether it’s right to do so fundamentally or whether it’s just the Euro’s turn to be the best of a very bad bunch is still worthy of debate but the trend is there, and the trend, as they say, is your friend.
The Pound still looks beleaguered overall but GBPUSD has bounced back above the 1.5700 support line having broken through yesterday but with lows of 1.5675 it’s so far held the 1.5670-90 support levels that I mentioned. I really don’t make these things up! Should 1.5670 break then the next target is 1.5635.
EURGBP had a pop at the strong technical resistance of 0.8575 that I also talked about but has retraced a little as I type, but we can still expect buyers in the dips. And don’t forget the usual Bundesbank month-end demand for the UK EU contribution that I’ve highlighted on many occasions.
The Aussie $ has stopped falling for the moment with strong support on AUDUSD around 1.0360 proving a step too far for the moment and overnight data showing that Australian Business Confidence saw its biggest jump in 10 years.
After lows of 1.0385 we’re back at 1.0460 which has helped put a cap on the Euro as EURAUD sellers emerge. The Aussie rally has also knocked GBPAUD back down to 1.5009.
Little in the way of data again today but there’s plenty going without it at the moment and we’ll start to see some interesting month-end flows.
The January transfer-window has now been likened to “gang warfare” by none other than Our ‘Arry, with his accusations of agents deliberately scuppering deals in trying to get one over on their rivals. Nothing new there then as the obscene amounts of money, and the cuts from it, continue to weigh heavily on the beautiful game.
Interbank Rates at 08:36 BST
Today’s Data: BST
15.00-US – CB Consumer Confidence
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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 firstname.lastname@example.org
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.