Mike Paterson’s Daily Forex Brief
We’ve seen further weakening of the Pound after the dismal first reading of the Q4 GDP data on Friday and, as per printed programme, traders have duly sold GBP across the board once again.
GBPUSD has broken down through my initial target of 1.5750, stalling on Friday at 1.5745 before retesting 1.5800 but the sellers have been out again in Asia and early-European trading to take it back down further to 1.5715. There are bids between 1.5670-90 and sellers again below 1.5800.
EURGBP has climbed higher again and so far been up to 0.8555 (GBPEUR down to 1.1689). My strategy of buying the dips here still holds true but we may see some consolidation before shooting higher again with strong technical resistance at 0.8575 to overcome first.
Overall the Euro has improved once again with EURUSD being pulled up to 1.3472 by USDJPY flying to 91.26 and EURJPY to 122.92 but we’ve seen a pullback on all of these as has been the recent trend.. Buying the dips still holds as the strategy until we see any significant reversal.
Elsewhere equity markets are holding on to January gains with the FTSE just shy of 6300, levels not seen since 2008, with long-time bears starting to turn around. Gold is trading around $1650 and showing some degree of support whilst not exactly making gains.
Little in the way of data out today so it’ll be the usual Monday muddle until we get back to the feeding trough.
And it’s been a frenzied feeding session for the FA Cup minnows over the weekend with Luton, Leeds, MK Dons and Oldham all claiming Premier League scalps and Brentford unlucky not to see off a woeful Chelsea.
Meanwhile the Shrimpers picked up their first three points in a while and Andy Murray had to admit he hasn’t quite got enough in the locker yet to see off Djokovic despite getting past a retreating Federer.
A great weekend of sport and I hope the coming week serves you equally well.
Interbank Rates at 08:46 BST
Today’s Data: BST
13.30-US – Durable Goods Orders
15.00-US – Pending Home Sales
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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.