Mike Paterson’s Daily Forex Brief
We’ve seen a busy 24 hours with plenty going on out there as traders test key levels again but without the follow through as yet.
Adding to the generally buoyant mood over the past 48 hours has been decent data from China but right now we’re seeing some pull-back as traders remain justifiably cautious.
EURUSD has had another go at 1.3400, given a leg up by another surge in EURCHF to 1.2386, but both have retreated now to 1.3340 and 1.2307 respectively as traders are quick to lock in some early year profits but there are plenty of analysts around looking for 1.4000 and 1.3000 on these pairs this year.
EURGBP had a look higher at 0.8325 resistance (GBPEUR down to 1.2012) once the 0.8300 (1.2048) had been breached but it too has fallen back a little in line with the Euro elsewhere. Expect plenty of buyers on the dips still though.
Similarly the Yen has clawed back some its recent losses with USDJPY back down below 89.00 having found the massive 90.00 level a step too far right now and capping at 89.63. EURJPY found 120.00 too much to breach as well and we’ve fallen back to 118.74 from highs of 119.99.
The Pound is still a mixed bag but really only at its best against faster weakening currencies such as the Swiss Franc and Rand. GBPUSD continues to look soggy and the rallies are quickly sold. Big support lines now coming around 1.6020.
Not helping the UK outlook will be the news that music retail giant HMV an institution since 1921 has gone into administration after bleeding losses for over 5 years with the potential loss of over 4000 jobs. Putting the final nails in the coffin has been the massive rise in on-line retailing and follows on from other high street names such as Jessops and Comet going down last year.
This news flies in the face of a more upbeat UK outlook from the OECD suggesting that the 2012 growth was the strongest of all G7 nations.. But that was then and this is now. First estimates of the latest GDP due next week will give us a better clue.
Southend’s mighty Shrimpers will need a strong performance tonight in their FA Cup replay if they are to take on Chelsea in the next round, while in sunnier climes England’s cricketers seem on top at the moment in the 2nd ODI in India, but it’s early days with only 28 overs gone.
And Rory McIlroy moves into the uber rich sports star list after a $125m deal over 5 years with Nike thus marking the end of an era replacing as he does Tiger Woods as their brand ambassador. Nice work if you can get it!
Interbank Rates at XX:XX BST
Today’s Data: BST
09.30-UK – CPI / RPI / PPI
10.00-UK – CB Leading Index
10.00-EU – Eurozone Trade Balance
13.30-US – PPI / Retail Sales / NY Empire State Manufacturing Index
15.00-US – Business Inventories
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 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.