Mike Paterson’s Daily Forex Brief
After the Eurogroup head Juncker yesterday said that the value of the Euro was “dangerously high” it seems like the market is returning to a more cautious mode and we’ve gone from good two-way business to seeing traders lose their appetite for risk, for the moment at least.
EURUSD fell back through strong support around 1.3300 and has so far seen lows of 1.3262 before attracting a few buyers but we’ve not rallied too far as yet.
EURGBP has fallen back through 0.8300 (GBPEUR up through 1.2050) but we’ve seen plenty of buyers on the dip as I suggested we would do and the pair is back at 0.8291 (1 .2062) from 0.8265 (1.2100).
EURJPY has also fallen back as investors buy back in the Yen and with USDJPY falling to 87.79 we’ve seen EURJPY come lower again to 116.46, 350 pips down from yesterday’s highs.
GBPUSD has held up relatively well after all the selling of late but still fallen below the key 1.6020 support line and we’ve seen a low so far of 1.6002. Next support comes in at 1.5990 with sellers between 1.6020 – 50. Overall the Pound is the proverbial mixed bag again but generally stronger on other pairs.
This shake-up will prove a good test for the markets early January belief in the Euro and today’s CPI data from the Eurozone and US may well have impact.
And what an impact the Shrimpers keeper Paul Smith had last night. Standing ( what a joy ) in the terraces at Brentford with my fellow Southend die-hard Clive we witnessed what can only be described as one of the great goalkeeping performances seen at any level.
OK so we eventually lost 2-1 but it could easily have been 5-0 down at half time rather than 1-0 if it were not for a string of remarkable saves from the former Brentford stopper and his defiant acts continued in the second half including a glorious penalty save at full stretch. It was only the faintest of deflections off a defender that finally saw him beaten for the winner which, when all’s said and done, the home side deserved.
But for a football fan of the old school it was a night to remember for all the right reasons, even if we don’t get chance for revenge over Chelsea in the next round. Time to focus on promotion now.
Interbank Rates at 08:42 BST
Today’s Data: BST
10.00-EU – Eurozone CPI
13.30-US – CPI
14.00-US – TIC Net Long Term Transactions
14.15-US – Capacity Utilization / Industrial Production
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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 email@example.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.