Mike Paterson’s daily Forex brief

Another day of ups ‘n downs in the wonderful world of foreign exchange as better than expected US corporate earnings gave a cheer after yet another sell off in earlier trading.

EURUSD had fallen again to 1.2215 but this time failed to break down through 1.2200 before the news from the US and we’ve since seen a steady climb to fresh recent highs of 1.2325 before falling back.

EURGBP had another look downstairs but has once again failed to break lower at this time although the rallies are being capped quite tightly around 0.7850 (GBPEUR support at 1.2738).

GBPUSD also dipped in early trading to 1.5582 but similarly had a decent rally to 1.5695 before falling back. The Pound overall has given up a bit of ground, not least of which against the Aussie as the in-vogue currency continues to rise. This has been further exacerbated by news from the German Bundesbank that they will start to buy Australian assets for their reserves before September adding to a wave of central bank buying of the Aussie $ over the past year.

UK Retail Sales just out have come in weaker than expected and given the Pound a further knock lower as I type.

USDJPY has fallen below 79.00 again in this risk-on environment and has moved close to the next big support line at 78.40. Expect some cross-currency action if that breaks and perhaps a little BOJ action too.

Forex Update-The Economic Voice Limited

Forex Update-The Economic Voice Limited

More data from the US this afternoon should provide more than a little feed from the trough but traders will still be loath to hang onto positions for too long.

The 141st Open Golf Championship starts today with Tiger the bookies favourite but with good support for Westwood and Donald to become the first English winner since Nick Faldo in 1992. Do they really have to the game to hold it together to take a major? All will be revealed.

As will who is the No 1 cricket nation when England take on the South Africans today in the first of a three Test series which effectively will decide who reigns supreme. Should be a cracking series if we ever get some decent weather.

Interbank Rates 08:47 BST

Currency Pair

Current

Overnight

High Low
EUR/USD 1.2292 1.2325 1.2275
GBP/USD 1.5673 1.5695 1.5644
EUR/GBP 0.7844 0.7855 0.7841
GBP/EUR 1.2746 1.2755 1.2729
GBP/CHF 1.5308 1.5318 1.5290
GBP/AUD 1.5050 1.5117 1.5048
EUR/CHF 1.2009 1.2014 1.2009
GBP/HKD 12.1512 12.1683 12.1287
EUR/HKD 9.5334 9.5595 9.5090
GBP/ZAR 12.7458 12.8025 12.7243
USD/JPY 78.60 78.83 78.47
GBP/CZK 32.1800 32.2926 32.1126

Today’s Data: BST

09.30-UK – Retail Sales

13.30-US – Weekly Jobless Claims

15.00-US – Existing Home Sales / CB Leading Index / Philadelphia Fed Manufacturing Index

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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