Mike Paterson’s daily Forex brief

One glimpse of the rate table below and you'd think we haven't dealt since this time yesterday but in fact we've seen some sharp moves up and down in the Euro particularly.


As I finished typing yesterday I talked about stop loss buying on EURUSD above 1.4460 which might then test the top of the range at 1.4500 and indeed that was the case dragging EURGBP up to 0.8770 ( 1.1410 ).

But this key level held due in no small part to the BIS ( Bank for International Settlements ) selling up here, possibly for China, but coinciding with a suspension in share dealing of Italian bank Unibank and then Finland threatening to withdraw from Greek bailout if they didn't get collateral in return.

EURUSD fell to 14360 quite rapidly but once again we saw the usual names (ACB’s) buying just above pivotal support around 1.4350. And we then traded 1.14380-1.4425 in sporadic fashion for the remainder of the day. We can expect more selling around 1.4500 and now hearing of stop-loss selling if 1.4385 gives way.

EURGBP fell quickly on the EUR move lower to test key support around 0.8700 (GBPEUR resistance 1.1500) but this level held and we've seen a move back up to 0.8747 (1.1440) before capping.

Elsewhere the Pound remains on the sidelines still but GBPUSD came under renewed pressure yesterday above 1.6525 as a large player sold a decent lump of GBPJPY.

We can expect further Eurozone debt rhetoric with the collateral issue remaining high on the agenda. Finland says it's an ongoing debate even though many other EU states including Germany say there will be no special cases.

Gold fell back on profit-taking and measures introduced on Asian exchanges, but has since bounced back up $20 to $1845 and stock markets too have fallen again this morning after decent consolidation yesterday.

Moody’s credit ratings agency has downgraded Japanese debt to AA3 from AA2 and will downgrade most Japanese banks too but this has had limited impact on the Yen even though we've had further rhetoric from the BOJ re Yen weakening but no intervention.

Just hearing that the ECB are in buying Italian bonds, which is no great shock but lending the Euro a little support as I type.

Another scrappy day ahead while we wait to see whether recent ranges can be broken.

Today's Data:

Weekly Economic Calendar-HERE

Interbank Rates as of 08.48 BST

Current Price

Overnight

High

Low

EUR/USD

1.4407

1.4443

1.4387

GBP/USD

1.6480

1.6515

1.6472

EUR/GBP

0.8740

0.8757

0.8726

GBP/EUR

1.1438

1.1460

1.1419

GBP/CHF

1.3068

1.3104

1.3032

GBP/AUD

1.5751

1.5778

1.5652

EUR/CHF

1.1414

1.1460

1.1396

GBP/HKD

12.7770

12.8040

12.7710

GBP/ZAR

11.8720

11.9524

11.7992

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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