Mike Paterson’s daily Forex brief
It’s been quiet in Asia but trading in NY on Friday provided some decent volatility in thin markets as I suggested it might.
There’s been little news of note but lack of liquidity created by traders away from their desks will always exacerbate moves especially when target levels are in sight.
EURUSD fell to test the strong 1.2240 level that I highlighted in Friday’s update but when it failed to break traders were quick to cover back and we saw a rapid rally to 1.2317. Time for the sellers to come back in though and we capped at the pivotal 1.2325 level. GBPUSD had similarly dipped to 1.5575 but rose even quicker causing a rush of short-covering to 1.5701 before settling back.
EURGBP remains a bit of a bystander at the moment but has to break out soon one feels. Bit of a Coin-flip on which way though as both Euro and Pound take it in turns to take it on the chin.
Rumours have been going around about a “secret” meeting between Merkel and Monti this week which may provide some short-term support/hope for the Euro bulls but with little in the way of data today it’s difficult to see where it’s going to break. Get your orders in both sides for sure.
The Aussie $ remains well supported with AUDUSD finding good sovereign interest to buy at current levels around 1.0540 but there’s talk of RBA interest to offer a few out around 1.0580. And talking of central banks the SNB has said it can keep its EURCHF floor in place for years if necessary… Mmm, we’ll see…..
And so the post London 2012 hangover can begin after a record GB medal haul and a stunning closing ceremony. Let’s hope it has indeed inspired a whole bunch of people in many ways with sport being the catalyst of hope for a new and present generation.
Have a good week all.
Interbank Rates 08:50 BST
Today’s Data: BST
Nothing of Note
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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 email@example.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.