Mike Paterson’s Daily Forex Brief
It’s not been a big move but we have at least seen some Euro buyers return as talk circulates that Greece will get a one-off payment of â‚¬44 billion from Germany and fresh rumours abound of Spain asking for its bailout soon.
The fact that a 2 year extension to Greece’s debt repayment would add around â‚¬32 billion to it seems to have gone unheeded and EURUSD has climbed to test resistance around 1.2740 with EURGBP also heading higher above 0.8010 after yesterday’s dip following the UK CPI data.
Resistance on EURGBP again comes in around 0.8020 and should this break we might expect a run up toward 0.8040 ( GBPEUR down to 1.2440 ) after yesterday failing once again to break through key support at 0.7960 with 0.7970 being the low until the Euro-positive news started to kick in to these lack-lustre markets. Meanwhile we remain firmly range-bound.
EURJPY has also been a big mover higher dragging USDJPY up toward 80.00 again but traders will remain cautious about getting too excited on these Euro gains and rightly so.
GBPUSD has failed to get back above 1.5900 but still has bids holding the support lines around 1.5860 and with UK employment data out shortly we should see a little bit of action.
Equity markets are still looking a little soggy and Gold has gone back into a tight range after its failure to break the $1740 resistance that I mentioned.
More data out this morning including the BOE Inflation Report, and this afternoon we have US PPI and Retail Sales ahead of the latest FOMC Minutes this evening.
Stop Press:Â UK Unemployment fell by 49,000 to 2.51 million in the three months to September, taking the jobless rate down to 7.8% from 7.9%. The ONS said almost all the 49,000 fall was due to a decline in youth unemployment. But the number of 16-24-year olds unemployed is 963,000.The unemployment level is now 110,000 lower than for the same period last year.
Interbank Rates at 08:43 BST
Today’s Data: BST
09.30-UK – Unemployment Rate / Claimant Count Change / Average Earnings Index
10.00-EU – Eurozone Industrial Production
10.30-UK – BOE Inflation Report
13.30-US – PPI / Retail Sales
19.00-US – FOMC Minutes
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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.