Mike Paterson’s Daily Forex Brief

Yesterday I suggested that the Pound was due for another potential slap after GBPUSD had failed to hold above 1.5800 and so it’s proved after a brief respite from its recent fall.

Nothing really new to cause it but as I said yesterday we had seen some consolidation at the end of last week after the market had got itself oversold and BOE Governor-elect Carney failed to deliver the monetary easing testimony they were expecting. Plus the Euro was under attack and that gave rise to EURGBP retracing some of its recent rise, and in a hurry, on Friday.

Anyhow, regular readers will not need reminding of my bearish UK/Pound stance and reasons for it, and ahead of key inflation data at 09.30 GMT we’ve seen further falls in GBPUSD and the Pound overall.

The failure to break 1.5800 again cannot be understated and, in these volatile times where trigger happy traders are constantly looking for a weak side, we saw it fall all day, with Middle East sovereign names being cited as prime suspects.

Once through decent support at 1.5750, and with EURGBP climbing back up through 0.8500, the momentum was enough for the Pound to take centre stage again with the Euro having a breather after Friday’s collapse. 1.5700 gave way, 0.8530 gave way and GBP was on a roll, down. Overnight in Asia we broke through strong support around 1.5660, then the previous recent lows of 1.5635 were the next target and we duly fell through as Europe got to their desks.

As I type, 1.5600 has now also given way and the old adage of not wanting to catch a falling knife was never truer. EURGBP is up to 0.8600 (GBPEUR down to 1.1625), while GBPCHF hits 1.4300, and GBPAUD falls to 1.5214.

Inflation data looms and there are speeches today from the SNB Chairman and ECB’s Draghi. Fasten your seat belts again folks ‘cos we’re in for another lively ride.

Which is exactly what England’s cricketers just had in New Zealand being dumped on their backsides by the hosts to level the three match 20-20 series with one to play. England’s women will get a chance to reap revenge by beating NZ in their crucial World Cup match tomorrow, and keep alive their hopes of defending their title by joining Australia in the Final.

mspfx.co.ukBreaking News: UK CPI and RPI come in as expected and GBP still under pressure. GBPUSD now looking to break some very key trend levels below 1.5600.

Fun 'n games ahead……………….

By the way dear EV followers this will be my last blog here for a while as I’m stepping away to pursue other projects. Thanks for taking the time to read my scribbles and do please give the wonderful guys here your full support. I’ll be back with some occasional stuff and you can always reach me at mike@mspfx.co.uk.

Editors Note: Thanks for your sterling service Mike; it’s been a pleasure to work with you. We wish you well over at ForexLive! And we’ll hold you to your promise of the odd article for us in the future!

Interbank Rates at 08:45 BST

Currency Pair


EURUSD 1.3379
GBPUSD 1.5608
EURGBP 0.8579
GBPEUR 1.1663
GBPCHF 1.4353
GBPAUD 1.5247
EURCHF 1.2306
GBPHKD 12.1010
EURHKD 10.3754
GBPZAR 13.9981
USDJPY 94.07
GBPCZK 29.5040

Today’s Data: BST

09.30-UK – CPI / RPI / PPI

10.00-UK – CB Leading Index

10.00-CH – SNB Chairman speaks

15.30-EU – ECB President speaks

19.00-US – Federal Budget Balance

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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