Mike Paterson’s Daily Forex Brief

After a lively day within contained ranges we’ve now seen a flurry of activity in Asia and early European trading ahead of US Q4 GDP and interest rate decision from the FOMC later today.

A busy day yesterday saw EURUSD fall back down to 1.3414 only to end the day in NY trying to get through the big resistance level at 1.3500 that I’ve been talking about as a target rate for this current bullish move for the Euro.

There has been plenty of speculation that China was the big seller protecting a 1.30-1.15 DNT (Double No-Touch) option put in place at lower levels but in Asia the price was finally breached and so far we’ve seen highs of 1.3516 as I type. Further option barriers are up at 1.3550 and beyond so we can expect some decent sell interest all the way up.

But the recent pattern/strategy of buying the dips has prevailed once again, as indeed it has in EURGBP which has also seen an early morning breach of the key 0.8575-80 level and so far we’ve traded as high as 0.8590 (GBPEUR down to 1.1640). Month-end buying will no doubt be adding to the upward pressure here.

This continued move up in the pair is once again capping GBPUSD and despite looking quite perky on a bounce-back from the lows to 1.5767 there’s talk of good sell interest at 1.5770 with stop-loss buying interest stacking up behind it. Currently back down to 1.5737 there’s no doubt the Pound remains very much on the back foot.

And we have UK money supply/lending data out at 09.30 which surely can’t make happy reading.

The Yen has had another sell-off with USDJPY back up to week’s highs around 91.30 giving further support to Euro buying as EURJPY hits highs of 123.54.   No change expected tonight when the Federal Reserve’s FOMC announce their latest interest rate decision but the accompanying statement will be keenly awaited for further clues. Prior to that we’ve got Q4 GDP and ADP Non Farm Employment Change, so it promises to be a lively day all round.

Balotelli finally heads back to Italy and the Manchester Fire Brigade (amongst many others!) can breathe a sigh of relief. But there’s a part of him we’ll surely miss and who says that a 22 year old kid earning bundles of cash for playing football every so often has to suddenly grow up ………. ?


Interbank Rates at 08:38 BST

Currency Pair


EURUSD 1.3505
GBPUSD 1.5740
EURGBP 0.8582
GBPEUR 1.1648
GBPCHF 1.4502
GBPAUD 1.5048
EURCHF 1.2445
GBPHKD 12.2032
EURHKD 10.4793
GBPZAR 14.2054
USDJPY 91.22
GBPCZK 29.8505

Today’s Data: BST

09.30- UK – M4 Money Supply / Net Lending to Individuals / Mortgage Approvals / Mortgage Lending

13.15-US – ADP Non Farm Employment Change

15.00-US – Q4 GDP

19.15-US – Federal Reserve Interest Rate Decision / FOMC Statement

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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