Mike Paterson’s daily Forex brief

More of the same yesterday with generally a more risk-on sentiment prevailing despite rising tensions over Iran, but we’ve seen little real movement for the most part.

EURUSD broke up through decent resistance at 1.3025 only to run into more sell orders around 1.3075 and I’m told these are still in place, all the way through to 1.3100 with stop-loss buying orders placed above that level. This morning we’ve seen Middle East buying of the pair from 1.3025, possibly for petro-dollar diversification, but we’ve stopped at 1.3070 and currently trading lower again.

GBPUSD followed EURUSD higher and broke through 1.5600 but similarly is running into sellers again above 1.5660, while EURGBP has traded scrappily in a 0.8317-0.8373 range and is currently bang in the middle of that range.

The Aussie $ has come in for a little selling after its decent rally and there is now talk of an AUDUSD barrier option sell interest at 1.0400 which is impacting on the other AUD pairs too.

FX Update

FX Update

Yesterday the Bundesbank came out and said that they expect the UK to take a full part in the Eurozone rescue plan which may fall on stony ground, particularly those with longer memories who recall with some degree of understandable anger the distinct lack of Buba support in 1993 (despite a treaty commitment to step in) when the Pound had to leave the ERM after the BOE threw billions of pounds at trying to hold GBPDEM at the 2.7783 peg. A day, as a front line trader, that I recall very well.

Focus this morning will be on the 10 year German Bund auction with results of the € 5 billion offer being known around 10.30 GMT, but before that we have some key UK money supply data and Eurozone CPI to consider.

All in all another scrappy day ahead.

Today's Data:

09.30-UK- Construction PMI / M4 Money Supply / Mortgage Approvals / Net Lending to Individuals

10.00-EU- Eurozone CPI

15.00-US- Factory Orders

Interbank Rates as of 08:33 BST

Current Price

Overnight

High

Low

EUR/USD

1.3050

1.3073

1.3022

GBP/USD

1.5637

1.5669

1.5626

EUR/GBP

0.8345

0.8347

0.8317

GBP/EUR

1.1984

1.2025

1.1979

GBP/CHF

1.4610

1.4650

1.4572

GBP/AUD

1.5107

1.5148

1.5069

EUR/CHF

1.2190

1. 2201

1.2161

GBP/HKD

12.1233

12.1481

12.1148

EUR/HKD

10.1162

10.1411

10.0747

GBP/ZAR

12.6430

12.6759

12.5755

USD/JPY

76.66

76.83

76.60

GBP/CZK

3.0949

3.1025

3.0772

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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