Mike Paterson’s daily Forex brief
As we start another week in the wonderful world of foreign exchange, it’s risk-off again as the spotlight remains on Eurozone debt with Spain at the top of the hit list.
EURUSD has fallen from closing in NY around 1.3075 and has this morning taken out the barrier option support at 1.3000 with lows of 1.2995 before finding a few buyers from the usual suspects.
EURJPY has been instrumental in this Euro selling once strong technical support at 105.55 was broken and been down to 104.64 but talk of buyers around 80.50 on USDJPY has stemmed the fall for the moment.
Even EURGBP has moved lower having traded in tight bands and has now broken down through strong support between 0.8220-30 to hit lows of 0.8210 (GBPEUR up to 1.2183) before coming to a halt in line with other Euro pairs.
If we stay below 0.8230 it opens up a move lower to 0.8140 according to the technical analysis but we know nothing is that straight forward right now.
Overall the Pound has done OK but lost ground to the advancing Greenback and GBPUSD has broken down to 1.5818 thus far, just above strong support between 1.5800-10.
Overnight China widened the USDCNY trading band from 0.5% to 1% and this has been generally well received as an indication that the Chinese slowdown may be orderly but I’m not buying that theory just yet.
French President Sarkozy has called for greater ECB involvement in the EZ bail-out which might win him a few votes as the election draws near, but is unlikely to impress the other half of his recent Merkozy double act
The risk-off/Dollar-positive scenario has also seen falls in gold, oil and stocks and traders will continue to watch US and EZ treasury bond yields with a fine tooth-comb, with a little US data out this afternoon to keep things ticking over.
Week-end sports headlines must feature the Shrimpers hard-fought point away to promotion rivals Torquay, and Andy Carroll’s last minute winner for Liverpool, which might just help keep him at Anfield. But the main story once again has to be the crazy lack of goal-line technology as amply illustrated in Chelsea’s second goal yesterday. OK, the ref made an absolute fist of a decision anyway, and they went on to win 5-1 but that was a key stage of the game and simply shouldn’t have been awarded. My father was campaigning for this technology over 30 years ago in his belief that sport should be played on a “level playing field” and not leave such key decisions to human error. Why have we waited so long?
Have a good week out there folks.
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