Mike Paterson’s Daily Forex Brief
It would appear that traders will be glad to make it across the line to the week-end, a long one in the UK, after a scrappy but lively week of ups ‘n downs.
Yesterday FOMC member Bullard tried to play down the previous day’s reaction to the Minutes and said that the markets were overpricing the chance of QE3.
In the absence of anything else to feed off and with EURUSD and GBPUSD both at strong technical resistance levels that I mentioned yesterday we’ve seen these two pairs cap out and fall to 1.2527 and 1.5824 respectively.
With GBPUSD falling faster we’ve seen EURGBP eventually break up through the 0.7920 level that I also suggested it might yesterday but I also said it would be a tough nut to crack and we’re currently capped at 0.7927 (GBPEUR basing at 1.2615) and heading lower again as I type.
The Greeks are still after more time to repay and this remains a work in progress with a meeting with Chancellor Merkel later today, while in the UK MPC member Weale says he prefers a rate cut to more QE if extra is stimulus is required. Not if chummy, just when.
The Aussie $ suffered further losses last night in a delayed reaction to poor Chinese PMI data from the previous night and we’ve seen AUDUSD fall to 1.0378 which is good news for GBPAUD sellers as that pair has climbed by default to 1.5233.
News just out has the second reading of UK Q2 GDP at – 0.5% which is an improvement on the –0.7% first reading but still the biggest quarter on quarter fall since Q1 2009. The Pound is little changed on the release. Only US Durable Goods left to trouble the scorers this afternoon and many traders will be looking to get away as soon as they can sneak out.
But it’s Friday, and it’ll be thin as usual and this week may well have one more sting left in its tail so get your orders in both sides.
The mighty Shrimpers look to open their account tomorrow (someone should tell ‘em they haven’t got to throw a six to start!) and today England’s cricketers look to seek instant revenge over South Africa in the first of the ODI series and prevent them from taking their one-day No 1 ranking as well but it’s raining down there as I sign off.
Rain? In this English summer? Surely not?!!
Have a great week-end out there whatever the weather brings you.
Interbank Rates at 08:50 BST
Today’s Data: BST
09.30-UK – Business Investment / GDP (Prov)
13.30-US – Durable Goods
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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.