Mike Paterson’s Daily Forex Brief
Yesterday the Euro survived its latest rattling of the cage and the buyers seem to have won the day, forcing the bears to run for the hills yet again.
Nothing of note behind the move really but in range-bound markets what doesn’t go down has to go back up and EURUSD’s failure to penetrate the strong support line at 1.2824 (200 day Moving Average) despite two attempts in successive days has meant a decent rally, particularly once the sellers at 1.2900-20 had been cleared out.
This move has been exacerbated by a turnaround in the EURAUD and EURJPY selling that we’ve seen this week and both have reversed as traders give up trying the short side, for the time being at least. EURAUD has been back up to 1.2638 and EURJPY to 101.92 as stop-loss orders get triggered along the way.
EURGBP has also moved higher again and so far has capped at 0.8086 (GBPEUR down to 1.2365) leaving GBPUSD stuck in a hole between 1.6000 and 1.6100. Overall the Pound looks a tad softer but still a mixed bag.
One of the main drivers of the Euro buying in European trading so far this morning has been talk of a Spanish request for their bailout money this week-end, a move that has been rumoured before and one that is generally recognized to be a positive in the big scheme of things.
I’m told there’s plenty of selling interest on EURUSD between 1.2990-1.3000 so we may well see the rally stall later and there’s Eurozone Industrial Production out at 10.00 BST, but some more Euro positive vibe and we may well see more short positions squeezed in a fickle Friday market. Take your pick!
Tonight England’s footballers take on the lowest ranked side in the world, San Marino, but tomorrow the mighty Shrimpers have a more difficult task away to Rotherham to get their winning ways back on track. World Cup to League Two – thus demonstrating this blog’s ability to embrace all levels of our beautiful game!
Have a great week-end.
Interbank Rates at 08:43 BST
Today’s Data: BST
10.00-EU – Eurozone Industrial Production / UK- CB Leading Index
13.30-US – Core PPI
14.55-US – Michigan Consumer Sentiment (Prov)
19.00-US – Federal Budget Balance
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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.