Mike Paterson’s Daily Forex Brief
The Euro did indeed come lower yesterday as I discussed but there seems to be enough buyers in the dips right now to prevent any major move south.
EURUSD fell through the first support at 1.3050 soon enough but then took its time to challenge the next decent line around 1.3020-30 whereupon we found some buyers happy to pick a few cheap ones up, perhaps anticipating a 1.30-1.32 range for a while. We have even since rallied to 1.3085 before falling back a little.
I did say if we breached the 1.3030 area we could see some acceleration lower but that hasn’t happened with buyers also protecting the 0.802-30 area on EURGBP, another key level I referred to yesterday. It’s a little Catch 22 to be honest and if one broke significantly then we would expect a downward drag.
The other factor in the Euro support though has been last night’s decision by the Bank of Japan to increase QE by 10 trillion Yen and this has weakened the JPY across the board with USDJPY and EURJPY both making a move higher. The decision by the BOJ was not entirely expected so we must wait to see its true impact after further analysis.
GBPUSD held its gains as EURGBP fell but seems stuck in a 1.62-1.6300 range at the moment. The release of the MPC Minutes shortly might shake things up a little and we’ll know soon enough.
In the world of sport, Southend went down 1-0 to the league leaders despite a decent showing, but Man City really should have held on to something with only minutes to go, deserved or otherwise…..
Interbank Rates at 08:34 BST
Today’s Data: BST
09.30-UK – BOE MPC Minutes
13.30-US – Building Permits / Housing Starts
15.00-US – Existing Home Sales
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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.