Mike Paterson’s daily Forex brief

We’ve seen a break higher on the Euro as traders give up on recently acquired short positions having seen no real momentum on the downside and ahead of a raft of data today.

EURUSD has been up to 1.2386 so far having broken up through the 1.2325 pivot level I mentioned yesterday. I keep saying these are thin markets and so it’s proving. Volumes won’t be high here but it’s enough to freak out short term traders caught on the wrong side.

FX markets are always as fickle as fickle can be and it’s as likely to trade back down below 1.2300 as it is to break through the next key resistance lines around 1.2435 but for the moment the bears are on the back foot.

The rally in the Euro has been seen across the board with EURGBP breaking up through the 0.7850 resistance line to so far hit 0.7884 ( GBPEUR down to 1.2682 ) and EURAUD a major play up to the highs of last week around 1.1760, which has kept a lid on the Aussie $ generally.

GBPUSD has been carried higher in the EURUSD slip stream and is holding gains above 1.5700 as I type but overall the Pound has been a mixed bag once again (see rate table below).

A busy morning for data with UK inflation numbers out at 09.30 BST then Eurozone GDP and Industrial Production plus the key German ZEW stats at 10.00 BST. This afternoon brings US CPI and PPI plus Retail Sales.

Forex Update-The Economic Voice Limited

Forex Update-The Economic Voice Limited

So it should be a lively day with tests both sides.. And talking of Tests the last of the three of the cricket variety versus South Africa starts this Thursday at Lords without Kevin Pietersen who has been dropped for allegedly texting his SA compatriots some derogatory remarks about his skipper and team mates.

Why anyone is remotely surprised by this cricketing genius but spoilt brat who enjoys throwing his toys out the pram is beyond me. Someone needs to get hold of him and give him a good slap of common sense.

Hey ho, back to the trading screens!

Interbank Rates 08:35 BST

Currency Pair

Current

Overnight

High Low
EUR/USD 1.2374 1.2386 1.2325
GBP/USD 1.5705 1.5712 1.5674
EUR/GBP 0.7882 0.7884 0.7861
GBP/EUR 1.2686 1.2723 1.2682
GBP/CHF 1.5237 1.5284 1.5232
GBP/AUD 1.4905 1.4941 1.4893
EUR/CHF 1.2011 1.2014 1.2008
GBP/HKD 12.1761 12.1815 12.1520
EUR/HKD 9.5981 9.6053 9.5512
GBP/ZAR 12.7337 12.8229 12.7076
USD/JPY 78.55 78.61 78.29
GBP/CZK 31.7980 31.9830 31.7590

Today’s Data: BST

09.30-UK – CPI / RPI

10.00-EU – Eurozone GDP / German ZEW Economic Sentiment / Eurozone Industrial Production

13.30-US – CPI / PPI / Retail Sales

15.00-US – Wholesale Inventories

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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