Mike Paterson’s daily Forex brief

Yesterday saw a continuation of risk-on sentiment buoyed by renewed hope of solutions to the Eurozone debt problems and we had gains in the Euro and commodity currencies but with the Pound limping along behind.

EURUSD was heading higher as I signed off and we carried on up triggering stops above 1.3550 and 1.3600 and finally capping at 1.3700 where there is talk of good size sell interest. GBPUSD also rose but couldn’t keep pace and it too stalled at strong resistance just below 1.5700. Talk now of big-stop loss buying should the strong technical resistance of 1.5725 breaks.

With much of the US out for Columbus Day we saw a sell-off in late NY trading as traders squared positions and this continued into Asia with EURUSD falling back to 1.3617 and GBPUSD to 1.5612 but there’s been a bit more buying in early Europe from both China and model funds to consolidate both these pairs at the moment. With ECB President Trichet speaking at the moment we can expect caution ahead of any further moves.

With the Euro in bid mode across the board yesterday and the Pound struggling to keep pace it was natural we should see EURGBP climb higher and once above the 0.8650 pivot level the next target was 0.8700 (GBPEUR 1.1494) which was duly breached and carried on going up to the next strong resistance line at 0.8740 (GBPEUR support at 1.1440).. We’ve so far capped at 0.8735 and drifted a little lower but should 0.8740 break convincingly then we can expect some good-size stop-loss buying to accelerate the move. Support will be at 0.8700 and of course 0.8650 again.

Commodity currencies had their day in the sun once again with the Canadian $ and Aussie $ both well in demand, the latter breaching 1.00 versus the USD for the first time in a while from recent lows of below 0.9500… It hasn’t held though and has slid back to 0.9930 as traders evaluate the strength of the move.

Gold continues to find support and stock markets have also rallied. The FTSE broke up through the resistance levels I mentioned yesterday (5370 and 5400) on the back of stronger US markets but never felt too comfortable above 5400 and has fallen back to 5356 as I type.

Little in the way of data again today but we are due an announcement on Greece from the EU/ECB/IMF Troika. I said yesterday that this could be a case of buy rumour/sell fact and we shall find out soon enough.

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

1.3635

1.3673

1.3617

GBP/USD

1.5640

1.5672

1.5612

EUR/GBP

0.8717

0.8735

0.8703

GBP/EUR

1.1468

1.1491

1.1447

GBP/CHF

1.4145

1.4169

1.4109

GBP/AUD

1.5730

1.5754

1.5639

EUR/CHF

1.2327

1.2350

1.2314

GBP/HKD

12.1257

12.1505

12.1040

GBP/ZAR

12.3914

12.4367

12.2468

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

Comment Here!

comments