Paterson’s Daily Forex Brief

Little to report from the last 24 hours after the Euro wobble that I reported turned out to be a damp squib based on false rumours that Bundesbank chief Weidemann was going to step down.

The denials were swift and the rest of the day saw the Euro consolidate again but still finding decent sell interest in the rally.

EURUSD capped at 1.3330 after the morning panic down to 1.3270 but has since headed back down below 1.3300 in early European trading, before finding buyers yet again.

Main story so far, although widely leaked, has been UK PM Cameron’s promise to give an “in-out” referendum on membership of the EU if re-elected. His outlook on the current state of the EU was damning hence warning that a vote now would serve no real purpose. He’s offered instead a vote by 2017 when he expects the EU to be in a better position for UK voters to assess.

So he’s finally delivered his speech but now he has to deliver the referendum, which won’t be quite so straightforward. The elephant hasn’t left the room just yet.

Markets have been largely unmoved by the speech with the Pound little changed but we have seen a move lower in the Euro generally as pressure builds on EURJPY down to 117.34 from 118.51.

EURGBP has fallen back from a rally above 0.8420 (1.1876) to test support around 0.8385 (1.1926 resistance) and is now back to 0.8400. GBPUSD has once again failed to breach big support at 1.5800 and has rallied above 1.5850 as I type but overall the Pound has done little.

That might all change shortly though as we get UK Unemployment data and the BOE Minutes from the last MPC meeting. Expect some flurry of activity at 09.30 GMT.

Congrats to League 2 side Bradford who last night knocked out Premier League Aston Villa to reach the final of the League Cup. Always good to see some proper giant-killing, although given Villa’s current woes this was no complete surprise.

And congrats to Andy Murray on reaching the Aussie semi’s in imperious fashion. Let’s just hope England’s cricketers can step up a gear in the 4th ODI currently underway in India.

Interbank Rates at 08:32 BST

Today’s Data: BST

09.30-UK- Unemployment Rate / Claimant Count Change / Average Earnings / BOE MPC Meeting Minutes

Agree or disagree? Then please leave a comment in the box below or contact me by e-mail.

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 mike.paterson@economicvoice.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.

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