Mike Paterson’s Daily Forex Brief
For those of us unlucky enough to be back at our desks today we’re greeted with little change from Friday’s closing after some understandably quiet sessions.
Not a lot to report really from the wonderful world of FX as many traders continue to play with their buckets and spades in exotic (and some not-so exotic) climes. EURUSD has been down to 1.2465 and GBPUSD to 1.5753 but both have picked up a few bids on technical support levels and we’ve been heading a little higher from the opening this morning.
EURGBP has remained in a tight range still with decent bids below 0.7900 (GBPEUR sellers at 1.2658) but failing to break up any higher than we’ve seen in the past few days. The Euro seems wanted this morning so it’s possible we could head higher to test next resistance at 0.7935 then bigger levels around 0.7960 (support 1.2563 ) especially with the natural month-end buying flows.
Eurozone news is thin on the ground again but German and French Finance Ministers, Schaeuble and Moscovici, have put recent spats behind them and agreed to form a joint policy making body to create a more integrated economic and fiscal policy within the Eurozone and to form a new banking supervisory board.
The new policy making body will be designed to help the failing southern European states such as Greece, Italy and Spain and will help to create longer-term strategies, which the Germans hope will eventually lead to full scale political union.
But the market’s main focus this week will be Fed Chairman Bernanke’s speech on Friday from the annual central bank gathering at Jackson Hole. Mr B chose this occasion in 2010 to launch the Fed’s second round of QE but the consensus this time is that he’ll wait ‘til the September FOMC meeting. It’s all guess- work of course but that’s what this market is based on right now, with traders pre-empting/second-guessing the next major moves then having to scramble out once the facts are known. Hey ho, been ever thus really.
Equities and Gold are in sideways mode still and there’s little data of note out today so we can expect more range-trading across the board unless we have any earth-shattering news. Talking of which the mighty Shrimpers picked up their first point of the season with a last minute equaliser and now move up to the heady heights of 21st! Anyone want to wager against a top three place after 10 games?
Have a good week out there.
Interbank Rates at 08:47 BST
Today’s Data: BST
15.00-US – CB Consumer Confidence / Richmond Manufacturing Index
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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.