Mike Paterson’s Daily Forex Brief
With traders getting back to their desks and kids heading back to school September has finally arrived and the market’s expectation for a volatile month ahead is gearing up nicely thank-you.
Fed Chairman Ben Bernanke provided the warm-up act on Friday and set the tone perhaps for the weeks to come with a will they/won’t they tease on further QE. Without setting down any specific detail Uncle Ben gave the markets enough hint that there will be something delivered at the next FOMC meeting on Sept 12-13th.
EURUSD rallied sharply to 1.2625 but then we saw an equally rapid move back down to 1.2550 as ratings agency Standard & Poors downgraded the Spanish region of Catalonia to junk status. But as Mr B continued to spout forth with accommodative tone we saw another move back up to 1.2638 before the move ran out of steam and traders were happy to take a quick profit while those caught short hoped that recent ranges would prevail.
Back down we duly came to test the strong support around 1.2550 again and we’ve not been below since but similarly not been back above 1.2600 either. Calm after the mini-storm ahead of the undoubted bigger ones to come, and with the US on Labour Day hols today there’s not likely to be much more going on today unless something hits the newswires or this morning’s PMI data from the UK and Eurozone is way off expectations.
GBPUSD had a similarly lively Friday afternoon but 1.5900 is proving a tough nut to crack again. Support still large at 1.5750-60 and smaller bids around 1.58220 so this pair too is delicately poised and currently at 1.5860. EURGBP is still stuck in a 0.7900-0.7960 (GBPEUR 1.2563- 1.2658) range, while the Aussie still looks a little vulnerable ahead of tonight’s RBA interest rate decision.
Eyes down and looking then for a busy few weeks as the US and Eurozone take centre stage, but others providing plenty of back-up too.
A fine week-end’s sport was had with the mighty Shrimpers clinging on for 83 minutes to claim their first win of the season, a bucketful of medals for ParaGB to put us second in the table, and a solid ODI victory from England’s cricketers that I witnessed at Lords yesterday. Game on all round!
Have a great week out there.
Interbank Rates at 08:24 BST
Today’s Data: BST
08.55-EU – German Manufacturing PMI
09.00-EU – Eurozone Manufacturing PMI
09.30-UK – Manufacturing PMI
14.30-EU – ECB President Draghi speaks / US Labour Day Holiday
05.30-AU – RBA Interest Rate Decision
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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.