Mike Paterson’s Daily Forex Brief
As I’ve been saying for a while the Pound has been a mixed box of frogs, but I’ve also warned once again that the sentiment has turned somewhat bearish with GBPUSD looking vulnerable all of last week.
The close on Friday below 1.5908 was significant on technical analysis and a repeat of that today would only encourage the sellers out in force with an immediate target of 1.5750. So far we’ve dipped to 1.5837 just short of the November lows but the pair has recovered to 1.5885 as I type.
This, at the start of a week which ends with the first estimates of the latest UK GDP data and numbers that are widely expected to see us in a triple-dip recession, possibly sparking a sovereign debt downgrade.
This has weighed heavily and now we’ve seen EURGBP reach highs of 0.8406 (GBPEUR 1.1895), levels not seen since February of last year.
EURCHF has fallen back significantly from last week’s 1.2570 highs and this has helped cap EURUSD which failed to breach 1.3350 sell interest and currently sits at 1.3305. But it’s a double edged sword for the Pound as EURGBP retraces back to 0.8380 (1.1933) but with GBPCHF falling to 1.4787.
Similarly GBPAUD has also fallen to 1.5083 as Aussie buyers prevail and the Pound’s lower against the Yen to 141.80 as USDJPY once again fails to hold above 90.00.
So all in all not a good start to the week for a snowed-in UK and my timeless mantra of selling rallies in the Pound prevails once again. Sorry folks, but from where I’ve been sitting for the past few years this is definitely one commentator not looking through rose-tinted goggles.
But hey I support Southend United so there’s no chance of that anyway! Snowed off on Saturday my footballing highlight therefore has to be the irony of Fergie suffering an injury-time equaliser against Spurs having had a penalty claim denied.
And England’s cricketers have work to do if they are to turn round the ODI series in India having now suffered two heavy defeats, while England’s favourite sporting Scotsman Andy Murray has just powered his way through to the Aussie Open quarter-finals.
It’s going to be an interesting week all round.
Stay safe out there.
Interbank Rates at 08:31 BST
Today’s Data: BST
Nothing of note
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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.