Mike Paterson’s daily Forex brief
As traders await the next instalment of the Greek bailout implementation with today’s expected vote by parliament the main feature of these markets (apart from inertia) continues to be the weakening of the Japanese Yen following last week’s surprise BOJ easing measures.
USDJPY has now broken back up through big psychological and barrier-option resistance at 80.00 and this in turn has sent EURJPY through strong levels at 106.00, giving the Euro a good deal of support across the board.
This underlying trend may not be seeing EURUSD and EURGBP break up through 1.33300 and 0.8410 just yet but it does put a good floor under the Euro, along with reported promises of support from China, while the Greek bailout process continues to fray market nerves.
In general terms we’re seeing the ranges getting tighter and tighter but we shouldn’t expect to see this continue for long – it never does- and there’s still plenty of volumes being traded while traders await the next big move.
Forex Update
Stop Press : Minutes from this month’s BOE MPC meeting have just come out showing that the vote for £50 billion extra QE was 7-2 meaning another dissenting voice looking for £75 billion but 9-0 in agreement to keep interest rates unchanged. The additional vote for larger QE has given the Pound a kicking with GBPUSD falling rapidly to test support at 1.5700 and EURGBP finally breaking up through 0.8410 to so far hit highs of 0.8435 (GBP EUR down to 1.1861).Will we now see further momentum and GBP weakness? Watch this space!
Oh, and in the wake of the Shrimpers tripping up badly again last night I’ve got to take my sporting cheer by paying respect to England’s cricketers in their 4-0 ODI series win against Pakistan to restore at least a little pride after their equally comprehensive test series defeat. The joys and pains of following League 2 football and the England cricket team are ever entwined……..
Agree or disagree? Then please leave a comment in the box below or contact me by e-mail.
So the pound taking a kicking would explain the sudden surge in the GBP gold price in the last hour or so? While it stayed steady in other currencies.
Yes,Striker
With gold priced in USD and GBPUSD falling over half a cent in rapid time after the BOE Minutes you're deduction is correct.
As for staying steady against other currencies then not so, as I reported it my piece.We saw EURGBP rise through key levels around 0.8410 meaning a fall in GBPEUR to 1.1856 from overnight highs of 1.1937.
We've also seen falls in the Pound against the Swiss and Aussie, amongst others, since the news.
Although prices are basing at the moment I remain a GBP bear and looking to sell rallies still.
I hope this helps.. Feel free to ask any more questions arising or about the Fx markets in general.