Mike Paterson’s daily Forex brief

As concerns over the Eurozone remain and we wait to see what develops in Greece and Italy under new regimes it’s been a similar story in the FX markets as traders continue to have little idea of what to do next, and we’ve seen the usual volatility in tight ranges.

It was a case of risk-averse sentiment for most of yesterday and we’ve seen EURUSD fall below 1.3600 but with good two-way business all the way down. GBPUSD also fell to 1.5872 but once again plenty of buyers around and this has given EURGBP another shove down having failed to breach 0.8600 (1.1628) yesterday. EURGBP has technical support around 0.8535 and we’ve so far held at 0.8540. GBPUSD has offers at 1.5925 and sell-stops building now down through 1.5880 ahead of some bids at 1.5860 down to 1.5845. I’m hearing talk of buyers in EURUSD around 1.3570 and more at 1.3500 but sellers back up in the rally around 1.3640.

Comment earlier this morning from the SNB’s Vice Chairman Jordan that they are ready to take further action has pushed EURCHF back above 1.2400, but he was adamant that the SNB will not be swayed to act any more quickly by business groups and commentators. The Japanese and Fin Min have also both been spouting forth on taking further action to curb Yen strength.

Overnight the RBA minutes from the last interest rate meeting gave a more dovish outlook than expected thus reducing the chances of further interest rate cuts in the short-term but we’ve seen the Aussie $ fall back after a brief rally on the release, and this should worry the AUD bulls.

Loads of data out today with UK inflation figures the next up at 09.30 and doesn’t augur well for UK growth as wage increases fail to keep up with rising prices for the majority of the population. In these days of necessary austerity even optimistic forecasts of falling prices after next year will be small comfort at this. A debate in the House of Commons today over fuel prices will only highlight this further. Last night PM David Cameron gave the annual Mansion House address and will once again not have endeared himself to Merkel and Co with some of his rhetoric, as he continues to try and distance the UK from the Eurozone’s problems. His “we’re all in this together” mantra would appear to stop at the English Channel       .

At 10.00 GMT we have the key ZEW economic sentiment data from Germany and Eurozone followed by PPI, Retail Sales and Empire State Manufacturing Index from the US AT 13.30

Stop Press: EURUSD falling through support at 1.3550 as I type and EURGBP testing key support around 0.8530.

Let today’s battle commence…………

Today's Data:


Live Economic Calendar Powered by Forexpros – The Leading Financial Portal

Weekly Economic CalendarHERE

Interbank Rates as of 08:09 BST

Current Price

Overnight

High

Low

EUR/USD

1.3609

1.3642

1.3575

GBP/USD

1.5918

1.5933

1.5872

EUR/GBP

0.8551

0.8576

0.8540

GBP/EUR

1.1692

1.1711

1.1659

GBP/CHF

1.4517

1.4551

1.4435

GBP/AUD

1.5603

1.5657

1.5549

EUR/CHF

1.2401

1.2429

1.2365

GBP/HKD

12.3412

12.3528

12.3055

EUR/HKD

10.5552

10.5950

10.5077

GBP/ZAR

12.7761

12.8227

12.6945

USD/JPY

76.97

77.50

76.91

GBP/CZK

3.0106

3.0237

3.0018

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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