Mike Paterson’s Daily Forex Brief
After the consolidation came another attack on the Pound ahead of today’s first reading of the key Q4 GDP but with expectations ranging from –0.5 to +0.2 the market awaits with bated breath.
Regardless of the outcome it’s still not a going to be a strong figure, merely one not quite as bad as worst expectation. And with Nick Clegg now admitting they might have overdone it on spending cuts the Pound continues to get slapped.
GBPUSD finally broke down through the strong 1.5800 support line and then overnight duly made its way almost to the 1.5750 target level that I forecast previously. 1.5760 has been the low so far and with EURUSD getting a further boost from Yen and CHF weakness we’ve seen a rally this morning back above 1.5800 while traders trim back ahead of the data.
EURGBP has soared again and so far tested 0.8500 (1.1764) on a double whammy of EUR strength/GBP weakness before retracing a little. I’ve been recommending buying the dip on this pair for some time now and I don’t see anything to change that view.
EURUSD has finally broken through 1.3360 resistance and then further through 1.3400 in Asia. So far we’ve capped at 1.3437 but expect more buying on any dips with EURJPY, EURCHF, and EURAUD all very much on the march higher.
USDJPY has jumped higher again and so far seen highs of 90.85 as traders react to further comments from Japanese officials on the need for Yen weakness.
So it’s eyes down and awaiting 09.30 for the UK GDP as today’s main event shortly. Whatever the outcome we’re going to see some fast and frantic reaction – and it’s Friday just to add to the heady cocktail.
And talking of heady cocktails what price on a Murray win versus Federer in the Aussie Open semi taking place as I type and three points for the mighty Shrimpers tomorrow, weather permitting of course!
Have a great week-end wherever it takes you.
Interbank Rates at 08:48 BST
Today’s Data: BST
09.00-EU – German IFO Business Climate Index
09.30-UK – Q4 GDP
15.00-US – New Home Sales
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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.