Mike Paterson’s Daily Forex Brief
Quite apart from the expected lack of real action from the EU summit (banking union amendments apart) traders have been getting nervous again after Google announced Q3 profits were down 20% to $ 2.18 billion.
The news was leaked to the markets by their printers filing an early draft before the results were scheduled to be officially released after the closing bell. Chaos and mayhem ensued and the stock dropped 9% in a flash before trading was suspended. When it resumed they ended the day only slightly better at 8% down.
Despite bullish talk from CEO Larry Page the markets, FX included, hardly needed any excuse right now to get the jitters again and we saw a decent sell-off as risk-off sentiment prevailed.
EURUSD dropped to strong support around 1.3070 and has this morning been down further to 1.3046 before ACB buying interest emerged possibly to defend an option expiry later today at 1.3050.
But the biggest loser was GBPUSD which showed no interest in holding any recent gains and has fallen to 1.6032 after stop-loss selling was triggered all the way down. This has forced GBP selling on other pairs too and we’ve seen GBPAUD break down through previous strong support around 1.5540 to 1.5459 before steadying. The move was exacerbated by EURAUD selling down to 1.2585. GBPCHF is lower and has been to 1.4828.
EURGBP has broken higher again to 0.8148 before settling back (GBPEUR down to 1.2272) to current levels around 0.8130 (1.2300) but it remains range bound between 0.81-8150 pending any further news.
In the absence of any key data today traders will focus back on the EU summit rhetoric but will hardly be encouraged to push the boat out again on a Friday after yesterday’s wobble showed just how fickle any up move can be.
Which we hope is not what will happen to the mighty Shrimpers’ charge up the heady heights of the League Two table tomorrow with the hope of another three away points to lift them into a play-off spot. Yep, I know it’s early days but these things matter at which ever end of the football spectrum you choose to spend your cash and emotion!
Oh, and KP gets his expected recall to the England cricket squad to tour India over the next few weeks after apparently a good kiss ‘n make up session with his ol’ muckers who realise that to play with him and stand a chance of winning is marginally preferable to the alternative.
Have a great week-end all.
Interbank Rates at 08:48 BST
Today’s Data: BST
09.30-UK – Public Sector Net Borrowing Requirement
15.00-US – Existing Home Sales
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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 firstname.lastname@example.org
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.