Mike Paterson’s Daily Forex Brief
What doesn’t go down must, invariably, go back up and thus it’s proved yesterday and overnight after various comments and corrections.
ECB member Nowotny came out with a bullish Euro stance contrary to that of the Eurogroup’s Juncker and then last night the Japanese government trade minister fell in line correcting his previous comment that warned about excessive Yen weakening.
Cue USDJPY heading up to 88.95 dragging EURUSD back over 1.3300 and testing decent resistance at 1.3350 with EURJPY back to 118.77.
With the general feel-good factor returning to the Euro we’ve seen EURCHF need no excuse to resume its upward trend and we’ve now tested barrier-option resistance at 1.2450, a rise of almost 400 pips in January thus far. These are levels not seen since November 2011 and a test of 1.2500 is very much on the cards. A significant break of this targets 1.2800. Heady stuff indeed for a pair trading so tightly for so long.
And EURGBP has joined the party again, finding the support I anticipated below 0.8300 and has now burst higher again on this Euro-positive/buying by default move. So far this morning we’ve seen highs of 0.8337 bringing GBPEUR down below 1.2000 for the first time since March last year.
Adding to the EURGBP move has once again been the reluctance of GBPUSD to show any signs of a rally and we should expect sellers again between 1.6020 – 50 after yesterday’s dip to 1.5975.
So January is proving to be a lively month all round and seemingly shaking off the shackles of 2012, where trading ranges became the tightest in recent memory.
US data out later may have impact if markets want to return some focus back across the pond, but we can expect volatility still regardless.
On the sports front, with Pep Guardiola hedging his bets with a move to manage Bayern does that now pave the way for the ‘special one’ to return to Stamford Bridge? And have they both got their eyes on Old Trafford in a couple of years?
My comment yesterday extolling the joys of standing on the terraces at football matches received much support and I’m pleased to report that there are still clubs in the lower leagues untouched by the all-seating over reaction after the Hillsborough tragedy.
I’ve read recently that moves are afoot to implement some experimental standing areas in higher leagues and this must be welcome. My one over-riding memory of watching Premier League gamer was paying stupid money to miss half the action in a constant battle to keep up as the crowd in front of me stood up anytime the ball came near or down the line.
Bring back the terraces. We now know they weren’t to blame after all…………
Interbank Rates at 08:47 BST
Today’s Data: BST
13.30-US – Building Permits / Housing Starts / Weekly Jobless Claims
15.00-US – Philadelphia Fed Manufacturing Index
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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 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.