Mike Paterson’s daily Forex brief

Greece still dominates the markets with PM Papandreou stepping down so they can form a unity/coalition government to secure international financing and avert a collapse of the country’s economy, as well as the knock-on effects that would bring. Not that they seem to care to much for what goes on elsewhere.

Papandreou met with Antonis Samaras, leader of the main opposition party, and agreed to form a government to lead Greece to elections immediately after the implementation of European Council decisions on October 26. Those elections will now be held in February according to market talk this morning.

Markets in Asia reacted positively at first but then turned lower as the spotlight turned back on Italy and Berlusconi, and it’s not looking good for him or his country. Teflon-coated he may have been ‘til now but it’s difficult to see how even he can worm his way out of the current carnage. Tomorrow sees a confidence vote on the government’s budget policies and the IMF is on its way to take long hard look at the books. Not to mention talk of the ECB threatening to stop buying Italian bonds and all that on top of Berlusconi currently fighting four trials – with charges ranging from having sex with a minor, abuse of office and perverting the course of justice – and all are due to resume later this month.

EURUSD had an early rally to 1.3840 on the more positive Greek news but has since been back down to 1.3710 dragging with it EURGBP to 0.8562 (GBPEUR up to 1.1680) while also bringing GBPUSD down to 1.5980 from highs of 1.6080. Technical support on EURGBP remains at 0.8550 but a break through there should see some acceleration toward 0.8510 (1.1743).

Been plenty of EURUSD buyers in the dips again so far this morning but there’s also been support from further comments from SNB Chairman Hildebrand regarding further action to weaken the Swiss Franc. Regular readers will know this has been playing out for a while and gets a few mentions here and in thin overnight markets the comments were enough to spike EURCHF from 1.2200 to 1.2260 and then early European trading took it through the strong barrier option resistance at 1.2300 and flying higher to 1.2395 as I type. Next objective should be the previous rally high at 1.2475 but the SNB will need to back up the rhetoric with action to drive it much higher. Technical support now comes in at 1.2345.

The Pound overall is still trading as an afterthought in relatively tight ranges but focus will start to move toward Thursday’s interest rate decision and whether we’ll see any further QE.

Gold is looking perky still around $1370 as stock markets remained undermined.

And another 3 points for the Shrimpers who now proudly sit at the top of League 2, unbeaten in 10 games and with a clear 2 point cushion over their nearest rivals.. Heady stuff indeed….

Have a great week all.

Today's Data:


Live Economic Calendar Powered by Forexpros – The Leading Financial Portal
Weekly Economic CalendarHERE

Interbank Rates as of 08:38 BST

Current Price

Overnight

High

Low

EUR/USD

1.3724

1.3840

1.3712

GBP/USD

1.5991

1.6082

1.5980

EUR/GBP

0.8580

0.8613

0.8562

GBP/EUR

1.1651

1.1680

1.1609

GBP/CHF

1.4393

1.4401

1.4180

GBP/AUD

1.5509

1.5547

1.5378

EUR/CHF

1.2338

1.2347

1.2195

GBP/HKD

12.3978

12.4683

12.3892

EUR/HKD

10.6409

10.7115

10.6370

GBP/ZAR

12.7509

12.8069

12.5763

USD/JPY

78.11

78.25

78.05

GBP/CZK

2.9109

2.9220

2.8706

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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