Mike Paterson’s daily Forex brief

Welcome to another crazy week in the wonderful world of FX!

Last week ended with further deterioration in the Euro, risk-averse trades spreading to another fall in the stock markets and traders cautious about what the G7 might deliver in co-ordinated intervention.

Well, there was plenty of the usual rhetoric but no action from the G7 and that effectively told Japan to go it alone as far as intervention was concerned. But further rumours of Greek default and exit from the Eurozone (they simply say they run out of money in October), concerns still over Italy's austerity package vote on Wednesday and the resignation of the ECB's Stark have all combined to give the Euro another slap in Asian markets and it’s a definite risk-off sentiment prevailing still.

EURUSD fell sharply to 1.3498 and EURGBP to 0.8532 (GBPEUR up to 1.1726) but we've seen some usual ACB buying and profit-taking in more liquid early-European trading and a recovery in the Euro to 1.3602 and 0.8598 (1.1698) respectively.

A lively start to the week as I anticipated and there's still model funds selling the Euro rallies so we can expect good two way business for sure as European stock markets first fell sharply but also since recovered.

The Pound overall is enjoying another reprieve in this risk-averse environment as the Aussie and Rand get slapped and the CHF continues to be engineered lower by the SNB. GBPUSD however has fallen to 1.5792 just above strong support lines at 1.5780 and has since clambered back to 1.5820 as EURUSD finds a few buyers.

So attention remains on the Eurozone and now that we've broken down through the huge support/range line at 1.4000 on EURUSD, we should see some sustained weakness for the moment. But it's no picnic in the park for other major nations out there either and focus will also be on the USA and its own fragile economy amongst others to add to the general mayhem.

Little in the way of data today but the FOMC's Fisher pops up to speak this evening and may have impact as might the UK's RICS house price data tonight.

But there’s a whole load more to contend with out there and we will see a volatile week for sure. Hold on to your hats!

Today's Data:

Weekly Economic CalendarHERE

Interbank Rates as of 08.43 BST

Current Price

Overnight

High

Low

EUR/USD

1.3593

1.3659

1.3497

GBP/USD

1.5812

1.5889

1.5792

EUR/GBP

0.8598

0.8602

0.8532

GBP/EUR

1.1629

1.1726

1.1624

GBP/CHF

1.4017

1.4131

1.4011

GBP/AUD

1.5349

1.5388

1.5153

EUR/CHF

1.2054

1.2080

1.2038

GBP/HKD

12.2590

12.3187

12.2440

GBP/ZAR

11.4796

11.5290

11.4920

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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