Mike Paterson’s daily Forex brief
What goes up comes back down easily enough it would appear in these fickle markets, and after looking well supported on month-end flows for a lot of yesterday the Euro came under fire as weak US data gave the nod to risk-averse trades again.
I reported that USD selling for asset managers at month-end was giving EURUSD a fillip, plus the usual EURGBP month-end buying for EU contribution payments but by the middle of the afternoon in London we were seeing traders rushing out the exit doors as weak US data gave markets the jitters, and in these days that means any Euro bullish sentiment too. EURUSD came back down through 1.3150 with the help of an option expiry and then the march lower was on with 1.3100 proving little support and 1.3075 only a temporary respite this time around.
With sellers emerging on any rallies and EURGBP falling quickly too EURUSD dipped again to 1.3034 before bouncing and then fell to 1.3025 in Asia before attracting a few bargain buyers and we’re now back above 1.3100 for the moment. EURGBP fell rapidly once the month –end demand was gone as GBPUSD found good support and had no interest in following EURUSD down initially. We’ve seen 0.8281 (1.2077) traded in Asia with talk of good demand behind that at 0.8265 (1.2099) and so far we’ve rallied to 0.8311 (1.2033).
There is massive technical resistance at 1.5800 on GBPUSD and now there’s talk of a barrier option in place there which should add to the selling pressure if/when we get back up there. By the same token, if we break above say 1.5810 we should expect some rapid stop-loss buying to trigger further gains.
The Greek debt deal continues to dominate the newswires and you can take your pick of the various comments as to whether a deal is close or not, and how much of a haircut is being negotiated. The Germans remain adamant that the Greeks have got to meet certain criteria first still and so the talks continue.
Better than expected Chinese data overnight helped to restore some sort of positive sentiment and we’ve seen that spill over into early European markets but it’s anyone’s guess what’s on the cards for today. And to be honest while we stay in relatively tight ranges it doesn’t really change much anyway.
And talking of ups and downs I have to put my hands up and mention Southend’s awful 1-4 hammering from Swindon last night (I did say they were a bogey team!) who now leapfrog above us in the table.
0ooh, the thrills and spills once again both in the world of football and FX……
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