Mike Paterson’s daily Forex brief
We’ve been seeing plenty of month-end flows again with traders also trying to hunt down the weak side and take out the stop-loss orders.
USDJPY has been down to 81.82 taking out huge buy orders as well as triggering stop-loss selling around 81.90 but someone (initial rumour BOJ) came in to buy a large chunk at 81.95 which has stopped the rot for now. This continuing Yen strength which I’ve talked about all week is also dragging down other currencies in its wake.
EURUSD had a look below 1.3300 but then rallied strongly triggering forced stop-loss buying only to cap out again. EURGBP had drifted lower but still finds support around the 0.8330 (GBPEUR resistance 1.2005) levels I mentioned earlier in the week.
Crazy move of the morning so far has to be GBPUSD which took out large sell orders around 1.6000, then triggered stop-loss buying to 1.6033 then dropped like a stone and is currently back around 1.5975. Overall though the Pound has found a few buyers after a week of general weakness but is this as much to do with month-end book squaring as anything more fundamental.
I did say month-end madness prevails and we expect to see more before the day is out, and it’s a Friday! We’ve got Eurozone CPI out shortly then various US data out this afternoon as well as the start of the EZ summit to decide on the firewall amount, so there should be enough out there to leave everyone totally confused by the end of the day!
Talking of which, it seems my final words yesterday on the cricket cast a deep shadow over England’s batsmen in Sri Lanka and they lost their last 6 wickets for 31 runs to lose the First Test in gloriously inept fashion. Perhaps I should keep my cynical thoughts to myself next time. Just as well I’ve got another Shrimper game to look forward to! Yep, a glutton for punishment or what?!
Have a great week-end everyone, whatever your pleasure.
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