The current game of cat and mouse continues with the Euro trading in tight ranges but with great volatility as concerns remain over the Eurozone.

EURUSD has been up and down like the proverbial as indeed has GBPUSD as traders get spooked and counter spooked by the stream of rhetoric in these very uncertain times. The ECB continues to buy Spanish and Italian debt while China's support is still being courted by the Italians. Rumours abound that Greece will technically be in default by this weekend, and now traders are adding Portugal and Ireland to that list with default situations coming sooner rather than later.

Overall though the Euro is hanging in there still, due as much to the natural demand from Asia rather than any change in fundamentals or sentiment. EURUSD has steadied above 1.3600 but good name sellers remain above 1.3700, while EURGBP has broken up through the 0.8650 (1.1560) pivot line and so far touched 0.8689 (1.1510) before retracing a little.

Overall the Pound has once again had a reality check and its recent consolidation by default has been somewhat dented again which will be no surprise to my regular readers. GBPUSD eventually gave up its 1.5760 support and went down in a rush last night to test the next big barrier option support at 1.5700. Elsewhere GBPCHF is lower as too is GBPZAR amongst others. Only against the equally targeted Aussie $ has the Pound made any gains.

Gold is steadying again around $1830 and stock markets remain nervous but consolidating at these lower levels for the moment although bank stocks in the UK and Europe remain particularly vulnerable.

This morning sees UK unemployment and EU industrial production while this afternoon sees US PPI and retail sales with Treasury Sec Geithner popping up to speak at the same time.

So it remains scrappy out there and always does after any big moves like we've seen in the past week or so. Traders and funds need to sort the wheat from the chaff to assess what the next real move might be. In these unprecedented times that's a really difficult call as ever…..

Today's Data:

Weekly Economic CalendarHERE

Interbank Rates as of 08.37 BST

Current Price

Overnight

High

Low

EUR/USD

1.3658

1.3707

1.3590

GBP/USD

1.5756

1.5802

1.5705

EUR/GBP

0.8673

0.8689

0.8638

GBP/EUR

1.1523

1.1578

1.1507

GBP/CHF

1.3881

1.3934

1.3857

GBP/AUD

1.5392

1.5464

1.5226

EUR/CHF

1.2042

1.2051

1.2031

GBP/HKD

12.2160

12.2520

12.1760

GBP/ZAR

11.6118

11.7015

11.4868

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.

Comment Here!

comments