Mike Paterson’s daily Forex brief

The FX markets are as fickle as fickle can be and in the last 24 hours we've seen a change of wind (could have done with more of that on my sailing trip yesterday to Cowes) and traders have felt a little more inclined to take some risk/profit with little new supporting evidence. Plenty of rhetoric again of course and until any action is taken traders will feed off these utterings like frenzied gulls.

EURUSD has been up to 1.3675 before retracing a little and now has strong technical support around 1.3550. GBPUSD kicked higher too and we've now cleared resistance at 1.5600 to so far peak at 1.5675. Hearing some good names sellers around this morning from the 1.5640-50 level and just been told that stop-loss selling lined up below 1.5615.

EURGBP continues to range trade and we've seen good interest both sides around 0.8700 (1.1500). Don't forget that we're approaching month-end so we can expect the normal buying of EURGBP for the UK's EU contributions which may well have something to do with the GBPUSD selling I've just mentioned.

Overall the Pound continues to tread water but has lost ground against the risk-favoured currencies such as the Aussie and Rand and remains on the sidelines by comparison.

Gold has consolidated around $1650 and stock markets have edged higher but the FTSE still looks heavy above 5300.

Focus now turns to Finland (today) and Germany (tomorrow) and their votes on broadening the EFSF bailout funds. Finland's is expected to go through but important given their demands for collateral while Germany’s could signal the departure of Chancellor Merkel given the anticipated revolt from within her own Christian Democrat party accelerating the demise of the coalition which Die Spiegel this morning calls " already fatally fractured". Finance Minister Shauble says increasing EFSF is “a stupid idea ". And on top of all this the Eurogroup's Junker says the EU is not working hard enough to fight the debt crisis.

Still, hey ho, the market wants to buy some Euros so buy it will. There seems to be a craving amongst traders and investors for a solution to all the Eurozone ills and a growing belief that one will materialize to calm these choppy waters (got a bit of that sailing back from Cowes against the tide and in fading light!) but until such time we're still range trading.

And then the reality check can kick in again…

Today's Data:


Live Economic Calendar Powered by Forexpros – The Leading Financial Portal

Weekly Economic CalendarHERE

Interbank Rates as of 08.26 BST

Current Price

Overnight

High

Low

EUR/USD

1.3621

1.3639

1.3540

GBP/USD

1.5637

1.5675

1.5615

EUR/GBP

0.8706

0.8719

0.8670

GBP/EUR

1.1483

1.1534

1.1468

GBP/CHF

1.4009

1.4079

1.3993

GBP/AUD

1.5771

1.5873

1.5742

EUR/CHF

1.2197

1.2219

1.2168

GBP/HKD

12.1240

12.1530

12.1070

GBP/ZAR

12.2578

12.4093

12.1978

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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