Mike Paterson’s daily Forex brief

So what’s the latest? Well, Berlusconi won the budget confidence vote though only through abstentions which effectively meant he lost his majority, but he refuses to step down ahead of any elections and says he opposes any transitional government. Ho hum, that’ll be more greased palms and another liberal splash of Teflon combined with supreme stubbornness then. And Greece has still to decide who takes on the poisoned chalice as PM.

Just another average day in downtown Euroland, and the Euro has consolidated with the usual Asian central bank suspects buying the dips but just starting to look a little vulnerable. EURUSD had bids around 1.3780 but more sellers appearing now around 1.3825. European stocks are falling as I type as Italian bond yields rise to levels not seen since 1997 dragging EURUSD down to 1.3745 right now. More support seen around 1.3700-10.

Talk this morning of a large German name already in with a good size sell order in EURGBP and more selling interest from a UK pharmaceutical company is adding to the current downside pressure on the Euro and EURGBP is down to 0.8560 but has once again been unable to break the strong 0.8550 support that I’ve been mentioning. We’ll be keeping a close eye on this pair today methinks.

GBPUSD got a boost from this action but offers remain around 1.6125 while support is due at 1.6040-50.

EURCHF had the reversal I warned of yesterday in the wake of neither the SNB’s Jordan nor Hildebrand saying little more than already stated and Jordan’s slightly less than aggressive stance giving cause for a rapid drop to 1.2320 from 1.2425 in a matter of minutes. I hear more talk of strong bids between 1.2300-20 though and we’ve consolidated above 1.2350 since briefly heading back over 1.2400 before retracing. I expect this one to run and run and the pair remain a major play at this time.

Daily Forex Brief

Daily Forex Brief

UK Trade Balance data is due out shortly and we have US Fed Chairman Bernanke speaking this afternoon. All the Eurozone mess has conveniently taken the spotlight away from the US at the moment but rest assured their problems will be whizzing their way back to the front pages sometime soon.

Another lively day ahead but not one that is going to shed any new light on this sorry mess we’re in.

STOP PRESS: UK September Trade Balance -£9.8 billion versus forecasts of -£8 billion with a further downward revision for August and the Pound is being slapped with GBPUSD lower at 1.6010 and EURGBP back up to 0.8585. Awful data that should help to re-focus our gloriously complacent powers that be.

Today's Data:


Live Economic Calendar Powered by Forexpros – The Leading Financial Portal

Weekly Economic CalendarHERE

Interbank Rates as of 08:23 BST

Current Price

Overnight

High

Low

EUR/USD

1.3780

1.3859

1.3775

GBP/USD

1.6100

1.6122

1.6064

EUR/GBP

1.6064

0.8601

0.8554

GBP/EUR

1.1660

1.1691

1.1625

GBP/CHF

1.4428

1.4490

1.4377

GBP/AUD

1.5561

1.5607

1.5473

EUR/CHF

1.2370

1.2404

1.2355

GBP/HKD

12.4823

12.4993

12.4544

EUR/HKD

10.7052

10.7198

10.6813

GBP/ZAR

12.6816

12.7727

12.5634

USD/JPY

77.61

77.91

77.53

GBP/CZK

2.9475

2.9652

2.9291

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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