Mike Paterson’s Daily Forex Brief
It would appear that the 1.3150 option level that I mentioned yesterday finally proved a step too far for EURUSD and the sellers ahead of it won the day as traders were quick to trim back positions ahead of today’s ECB interest rate decision and press conference.
Whilst no change in rates is widely expected, either from them or the BOE these are fickle markets and discretion is indeed better than valour. The ECB press conference invariably throws up a curve ball or two and traders have been caught out too often before.
EURUSD has been down to 1.3041 but bounced back to 1.3077 currently with sovereign names once again buying in the dips. EURGBP broke down through the 0.8120 support line but has found the next support level at 0.8100 (GBPEUR resistance 1.2345) a tougher nut to crack.
EURCHF is lower again after its recent rally but is still holding above 1.2100 while EURJPY is also holding in there as USDJPY marches higher again.
The Pound is a tad lower overall after Chancellor Osborne’s Autumn Statement yesterday which, as expected, painted a gloomy picture while laying the blame everywhere apart from himself. There are tougher times ahead for the UK as I have been saying for eons now, and the jury is firmly out on whether the government’s plan of action will help or hinder.
GBPUSD is still clinging to 1.6100 having dipped to 1.6077 on the EURUSD fall, while GBPCHF and GBPAUD are both lower at 1.4907 and 1.5365 respectively.
UK Trade Balance figures just out have come in weaker than forecast with a global deficit of Â£9.5 billion for October versus -Â£8.8 billion in September. The Pound is little changed thus far.
To end on a more positive note England’s cricketers continue to dominate India in the 3rd Test and adopted Essex boy Alastair Cook has scored his 23rd Test ton to set a new English record. Having dismissed India for 316 England are 209-1 with Captain Fantastic still there on 133*. Top stuff fellas!
Interbank Rates at 08:52 BST
Today’s Data: BST
09.30-UK – Trade Balance
10.00-EU – Eurozone GDP
11.00-EU – German Factory Orders
12.00-UK – BOE Interest Rate/QE Decision
12.45-EU – ECB Interest Rate Decision
13.30-EU – ECB Press Conference
13.30-US – Weekly Jobless Claims
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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.