Mike Paterson’s daily Forex brief
Yesterday I mentioned that we were threatening some stop-loss selling being triggered on EURUSD at 1.2350 and so it proved after ex-ECB chief economist Issing said Germany should not be forced into bailing out its EZ partners and that the ECB should not buy bonds. With the prospects of relief for European debt markets more than a month away after the German constitutional court rules, we saw exacerbated selling in thin markets down to lows of 1.2260 overnight in Asia.
So far this morning we seen a few buyers appear on the dip but the rally doesn’t look too convincing. Next major support line is 1.2240 and a trigger through there on a thin Friday could see real downside momentum once again. EURGBP has so far been down to 0.7861 (GBPEUR up to 1.2721) but is a spectator on this move at the moment as UK data also undermines the Pound.
The Aussie $ has had its sails trimmed a little after the RBA last night warned that the strong AUD could seriously hamper growth. Cue profit-taking on the recent one-way buying and from highs above 1.0600 we’ve been back down to 1.0496 so far but GBPAUD has struggled to take real advantage failing to hold immediate gains above 1.4850 and falling back to 1.4815 as I type.
Not too much in the way of data today but hey, it’s Friday and it’s thin out there so always worth putting orders in both sides of the price.
Meanwhile at the Olympics we’ve seen history being made by Usain Bolt, and female GB boxer Nicola Adams, as well as a further clutch of GB medals but the real story for me has been the revelation that US 4 x 400m relay runner Manteo Mitchell broke his leg after 200m and still managed to complete the lap in 46.1 seconds. I’m never complaining about my dodgy old knees ever again!
Have a great week-end out there.
Interbank Rates 08:53 BST
Today’s Data: BST
09.30-UK – PPI Input/Output
13.30-US – Import Price Index
19.00-US – Federal Budget Balance
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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.