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No big solution for Greece leads to market disappointment

No big solution for Greece leads to market disappointment
September 19th, 2011
Author: Mike Paterson

Mike Paterson’s daily Forex brief

As I opined on Friday, the Eurozone Finance Ministers meeting offered little of real substance over the weekend and US Treasury Secretary Tim Geithner arrived with little more than a strong rhetoric from his paymaster, which in some quarters was simply dismissed on a “people in glass houses” basis.

Cue a disappointed market and EURUSD opening up 100 pips lower in Asia last night. The lack of any firm proposals and continued division in the EU ranks has once again given cause to a risk-off sentiment as world economies get to grips with the fact that there is little chance of any good news over the next months and that the global economic demise has severe knock-n effects. Furthermore that there is little point in blaming each other. Even George Osborne and David Cameron have ceased to gloat at our Euro neighbours now that they’re coming to realise/understand the impact on the UK.

EURUSD has been down to test strong support lines around 1.3650 and bounced back to 1.3700 but it looks heavy still.  EURGBP has fallen again through 0.8700 ( GBPEUR up through 1.1500 ) but is struggling to make further headway at this point, all the while GBPUSD looks heavy above 1.5800 still. A break below 1.5650 on this pair should see further acceleration south.

Elsewhere the Pound is little changed but remains undermined and is only really holding its own against the high yielders such as Aussie and Rand that tend to get slapped heavily at the outset of any risk-off moves. The former of course is also heavily exposed to Asian economic conditions and the jury is still out (on this desk at least) on whether the region can weather storm as global demand recedes further.

Stock markets have come lower in Asia and Europe, while Gold is back above $1820 after finding good name support around the $1760 support line toward the end of last week. Oil has seen further falls too as global demand falters.


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Little in the way of data out today but the Greek Finance Minister has said there are talks between the IMF and EU planned for 13.00 BST.

It’s going to be a cautious start to the week but similarly will need something of substance to lift the current gloom. The question is where is it going to come from, if at all…?

Today’s Data:


Live Economic Calendar Powered by Forexpros – The Leading Financial Portal

Weekly Economic Calendar-HERE

Interbank Rates as of 08.24 BST

Current Price

Overnight

High

Low

EUR/USD

1.3678

1.3799

1.3645

GBP/USD

1.5730

1.5797

1.5684

EUR/GBP

0.8698

0.8745

0.8691

GBP/EUR

1.1492

1.1508

1.1434

GBP/CHF

1.3870

1.3889

1.3812

GBP/AUD

1.5348

1.5377

1.5230

EUR/CHF

1.2067

1.2091

1.2053

GBP/HKD

12.1950

12.2470

12.1590

GBP/ZAR

11.8532

11.9268

11.7215

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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