Mike Paterson’s daily Forex brief

A busy start to the week as traders cover a few short Euro positions ahead of the latest Merkel-Sarkozy talks later this morning.

Whilst few are expecting much to come of them it’s understandable that after another wave of selling on Friday, and in Asia last night, that we should see some consolidation and even a small reversal while we await what they have to say.

EURUSD fell in Asia to the next key support level at 1.2665 but has since rebounded to 1.2775 in early European trading where it has so far met with plenty of real-money sellers. We can expect a sharp rally if 1.2780 break but lots of sell orders lined up around 1.2820 again.

Similarly EURGBP fell to 0.8221 (GBPEUR up to 1.2165) before it too rallied to 0.8266 (1.2100) as I type. The 0.8220-40 area should now provide some good support while the 0.8285-8300 remains pivotal given the strong support seen there on the way down.

There’s been talk of some decent buying in GBPUSD from a UK clearer for dividend payment purposes from the lows of 1.5395, but so far this pair has also been capped by good offers around the 1.5455 area.

FX Update

FX Update

EURCHF has fallen too but rumour of the SNB on the bid around 1.2125, as I‘ve mentioned before here and where they bought previously, has so far provided a base at 1.2131 and we’ve since headed a tad higher on the firmer Euro moves this morning.

Gold and stocks continue to trade sideways and this should continue for a while longer before further falls.

Little in the way of data today and I expect the recent patterns to continue with plenty of good two-way business but also plenty of interest to sell especially if the Merkozy talks offer little than the usual hot-air.

Have a good week one and all.

Today's Data:

11.00-EU- German Industrial Production

15.00-US- Consumer Credit

00.01-UK- BRC Retail Sales Monitor / RICS House Price Balance

Interbank Rates as of 08:36 BST

Current Price

Overnight

High

Low

EUR/USD

1.2763

1.2773

1.2765

GBP/USD

1.5446

1.5453

1.5395

EUR/GBP

0.8266

0.8266

0.8221

GBP/EUR

1.2100

1.2165

1.2096

GBP/CHF

1.4703

1.4789

1.4697

GBP/AUD

1.5105

1.5188

1.5058

EUR/CHF

1.2150

1.2168

1.2131

GBP/HKD

11.9753

11.9807

11.9357

EUR/HKD

9.8969

9.9046

9.8115

GBP/ZAR

12.6087

12.6440

12.4705

USD/JPY

76.89

77.02

76.78

GBP/CZK

31.2470

31.5560

30.6551

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.

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