Mike Paterson’s daily Forex brief

And the latest instalment of the Eurozone debt saga unfolded overnight as ratings agency Standard & Poor’s announced they are cutting Italian debt rating by one notch from A+/A-1 to A/A-1 and putting them on negative watch. Cue a lot of huffing and puffing from Italian PM Berlusconi (no change there then ….) saying that S&P have been totally influenced by the media…. Yea, right…..

Anyhow, EURUSD fell 80 pips on the news to break 1.3600 but has since recovered to test 1.3700 where it ran into another round of selling. EURGBP fell to 0.8677 ( GBPEUR up to 1.1525 ) but has since rebounded back to 0.8720 (1.1470 ) where we've seen some decent names selling, while GBPUSD once again finds sellers above 1.5700 having held the key support line around 1.5650 that I mentioned yesterday… Good corporate names on the bid around 1.5670 I'm just hearing and we're back up to 1.5690.

Traders remain cautious of selling too many Euros given its resilience to latest attacks and bad news but it does seem like there are enough sellers on the rally to cap it for the moment, and the same could be said for the Pound… Both look heavy but still in tight ranges so we can't get too excited until we break out.

Gold gave up its start of week gains above $1825 to head back down to test $1770 again, and while we're still seeing buyers emerge in the dips those holding long positions around this level must be getting more than a tad concerned that the rallies are getting weaker.

Stock markets went lower again in the risk-off environment but once again, as in currencies and gold, failing to make any real break out and we've rallied a little this morning in lack lustre trading.

German ZEW data on economic sentiment just out (-43.3) was worse than last time (-37.6) but not as bad as feared (- 45) and we've seen little impact.

Seems like it's going to be one of those days, but something's going to give soon. Perhaps everyone's keeping their powder dry until tomorrow evening's interest rate announcement from the US Fed but there's a lot of trading to be done before then……….

Today's Data:

Live Economic Calendar Powered by Forexpros – The Leading Financial Portal

Weekly Economic CalendarHERE

Interbank Rates as of 08.36 BST

Current Price

Overnight

High

Low

EUR/USD

1.3695

1.3699

1.3592

GBP/USD

1.5713

1.5720

1.5654

EUR/GBP

0.8714

0.8721

0.8677

GBP/EUR

1.1470

1.1525

1.1465

GBP/CHF

1.3833

1.3899

1.3826

GBP/AUD

1.5311

1.5434

1.5305

EUR/CHF

1.2063

1.2074

1.2050

GBP/HKD

12.1830

12.1880

12.1370

GBP/ZAR

11.9780

12.1659

11.9591

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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