Mike Paterson’s Daily Forex Brief

Plenty going on out there right now what with EU summits, US budget talks and the Japanese elections this weekend, and traders are rightly cautious as markets get thinner as we approach year-end.

Lots of expected positive rhetoric from Brussels but no key decisions made on Day 1 not that it’s stopped the Euro from remaining well supported overall. EURUSD baulked again at 1.3100 but then finally made a break in Asia up to the massive 1.3125 resistance level, capping at 1.3120 before falling back to 1.3070 where we’ve seen buyers re-enter. Good two-way business going on with plenty for traders to work off.

Euro strength is being further enhanced by Yen weakness, a feature of this week, ahead of this week-end’s elections in Japan. But last night’s Tankan Survey on the Japanese economy offered little comfort and we’ve seen USDJPY climb further to 83.97 and EURJPY to 109.99 where there is talk of large selling interest and this has capped further Euro gains for the moment.

Ratings agency S&P last night became the last of the big three to place the UK on ‘negative outlook’ but we’ve seen little impact on the Pound overall and it continues to be a real mixed bag of frogs.

GBPUSD now seems heavy above 1.6150 but supported around 1.6100 and EURGBP has been up to test key resistance around 0.8130 (GBPEUR down to 1.2300) before falling back. Support now at 0.8100 and 0.8080.

GBPAUD is at tad higher, GBPCHF lower, while GBPJPY has benefitted from the on-going Yen weakness to climb to 135.42.

US budget talks continue and there’s a bit of US data out later to fuel the usual Friday fayre.

MSPFX forex websiteMeanwhile in India our cricketers are definitely winning on points having carved out a first innings total of 330 with new-boy Root staying for a crucial 73 and Prior and Swanny also getting vital runs. James Anderson struck in the first over and there’s another wicket down as I sign off which brings Tendulkar to the crease…….. for one of the last times surely………

More certain is that the mighty Shrimpers have a tough game at home tomorrow against Bradford, conquerors of Arsenal this week. Three points needed really but a draw wouldn’t be so bad given how tight it is up there. At least it won’t go to penalties………

Have a great week-end all.

Interbank Rates at 08:50 BST

Currency Pair

Rates

EURUSD 1.3082
GBPUSD 1.6115
EURGBP 0.8119
GBPEUR 1.2316
GBPCHF 1.4883
GBPAUD 1.5294
EURCHF 1.2082
GBPHKD 12.4940
EURHKD 10.1444
GBPZAR 13.9564
USDJPY 83.76
GBPCZK 31.1036

Today’s Data: BST

10.00-EU – Eurozone Employment Change / Eurozone CPI

13.30-US – CPI

14.15-US – Manufacturing PMI / Capacity Utilization / Industrial Production

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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