Mike Paterson’s Daily Forex Brief
Yesterday saw a further retracement in the Euro continuing into Asia, but since then we’ve seen a decent recovery across the board.
As the concerns over “Euro overvalued” comments rippled through the markets and Spanish/Italian bond yields rose through the morning, Euro pressure was a constant digging away at recent gains.
EURUSD ended our day around 1.3520 having broken through the strong 1.3580-90 support line that had held on Friday. Bids were lined up between 1.3480-1.3500 and in Asia these finally gave away bringing with it stop-loss selling down to 1.3458. Cue a large Asian sovereign name buying at 1.3460 and guess what? Yep we’re back above 1.3500 and challenging fresh resistance levels around 1.3525 as I type. Sellers at 1.3550 and 1.3600.
EURGBP also followed EURUSD down with GBPUSD behaving as the immovable object around 1.5740. Overnight EURGBP has been down to test support around 0.8550 (GBPEUR up to 1.1695) but since bounced back to 0.8590 (.1642) as the Euro buyers get brave enough to come back in. Sellers at 0.8600, buyers still at 0.8550.
As I just said, after it’s Friday decline GBPUSD was solid as a rock providing the anchor for the Pound to improve across the board as the correction in the Euro unfolded and it’s still looking well supported around 1.5750 as we await Services PMI data at 09.30 GMT.
USDJPY has been well under-pinned again and is testing 93.00, which has also lent the Euro support as EURJPY buyers queue up once more.
All in all then an expected passage of play after the straight-line Euro momentum on a frantic Friday afternoon, and now we just have to see just how much of an appetite the market still has for January’s favoured son.
And one of music’s favoured son’s has sadly left us as The Troggs’s frontman and corn-circle enthusiast Reg Presley yesterday lost his lung cancer battle aged 71. As the performer of Wild Thing amongst a host of other classics we should forgive him for giving birth to Love is All Around, which Wet Wet Wet covered for the Four Weddings soundtrack in 1994 but then stayed at Number 1 for a mind-numbing 15 weeks.
It made him a heap of money though and we wouldn’t begrudge him that. Enjoy the video folks and put a little smile on your face.
Interbank Rates at 08:45 BST
Today’s Data: BST
09.30-UK – Services PMI
10.00-EU – Eurozone Retail Sales
15.00-US – ISM Non-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.