Mike Paterson’s Daily Forex Brief

We’ve seen a little caution return to the markets as EU leaders prepare for yet another summit in Brussels today and tomorrow. This will be the fourth such meeting this year and the 22nd summit since the crisis first hit Greece in 2009.

EURUSD had another look higher yesterday but ran out of steam and has since fallen back to 1.3082 with EURAUD a prime mover from the heady heights above 1.2700 back down to 1.2600.

This move has in turn sent AUDUSD higher to test 1.0400 and dragged GBPAUD down to 1.5509 despite uninspiring Chinese data. There’s talk of a fat finger on AUDUSD perhaps exacerbating this move.

EURGBP has gone back to sleep but interestingly has not fallen back with the Euro retreat elsewhere. This will be as much to do with a general sogginess in the Pound which prevails now with GBPUSD also a relative non-mover at 1.6123.

Greece is lining up another strike now that the Troika have left town to deliberate on their findings while the EU summit is offering little hope of any major breakthroughs on them, Spain, Portugal et al. The focus in Brussels will be on longer terms measures with banking union top of the list. There is also talk that Spain will be given a pre-emptive credit line ahead of any full bail-out request.

Back in the FX markets there are buy orders lining up around technical support at 1.3070 and 1.3040 while sellers will be back in between 1.3125-40. Support at 1.6110 and 1.6070 for GBPUSD with sellers at 1.6180 and 1.6215. EURGBP should continue to have support at 0.8100 (GBPEUR sellers 1.2345) and resistance at 0.8140 (1.2285 support).

UK Retail Sales data just out has shown a better than expected 0.6% rise for September and a 2.5% rise year on year. GBP found a few buyers immediately after.

So it’s eyes back on the wires as the EU rhetoric spews forth and traders over react accordingly…Or not as the case may be.

Forex Update-The Economic Voice Limited

Forex Update-The Economic Voice Limited

Which is the sort of laissez-faire performance that England’s footballers came up with in Warsaw yesterday and Uncle Roy was honest enough (what else) to admit that a draw was a fair result.

And worse news for footie fans is the BBC survey published today that shows the average cost of the cheapest adult ticket in the top four divisions of English football has risen by 11.7% – more than five times the rate of inflation. Now let’s face it, if we were talking about train fares here the nation would be up in arms and marching on Parliament as I type amongst the throes of a government enquiry… Something wrong somewhere surely…..

Interbank Rates at 08:45 BST

Currency Pair

Current

Overnight

High

Low

EUR/USD 1.3093 1.3120 1.3082
GBP/USD 1.6123 1.6151 1.6115
EUR/GBP 0.8122 0.8130 0.8115
GBP/EUR 1.2308 1.2324 1.2298
GBP/CHF 1.4891 1.4910 1.4877
GBP/AUD 1.5519 1.5577 1.5509
EUR/CHF 1.2096 1.2105 1.2092
GBP/HKD 12.5001 12.5218 12.4939
EUR/HKD 10.1560 10.1819 10.1378
GBP/ZAR 13.8464 13.9156 13.7860
USD/JPY 79.10 79.21 78.91
GBP/CZK 30.4070 30.5378 30.3727

Today’s Data: BST

09.30-UK – Retail Sales

13.30-US – Weekly Jobless Claims

15.00-US – Philadelphia Fed Manufacturing Index

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.

Comment Here!

comments