Mike Paterson’s daily Forex brief

After a further sell-off yesterday we’ve seen some short-covering ahead of today’s US Thanksgiving holiday but a sell-on-rally sentiment is still around.

EURUSD came down to test strong support around 1.3320-40 after yesterday’s German bund auction had a take-up of only €3.6 billion from a €6 billion offer and this simply added fuel to the fire but surprised the markets nonetheless and we saw a rapid fall.

EURGBP , from looking perky above 0.8610 fell sharply from 0.8638 (1.1576) to 0.8588 (GBPEUR upto 1.1644) but held this key area of support (remember it proved to be large resistance last week on the way up) and we’ve since seen a move back to 0.8618 (1.1603) on the back of Euro short-covering generally.

EURUSD has climbed back up to test resistance around 1.3410 as traders and hedge funds look to cover and/or hedge short positions ahead of today’s holiday but there’s little else giving the Euro much support right now. Slightly better than expected German IFO data out just now gave another little fillip to this rally but it’s stopped again for the moment. Talk now of large barrier-option support at 1.3300.

The Aussie $ saw a further fall below 0.9700 v USD and to 1.6044 v GBP but has since found a few buyers on the back of the Euro demand and hence better risk sentiment generally, while EURCHF has held on to 1.2260 support but failed to break back up through 1.2300.

Daily Forex Brief2

Daily Forex Brief

GBPUSD also fell yesterday, taking out support at 1.5580 but has since rallied from 1.5516 . Offers now at the pivotal 1.5580 and 1.5610 which may be tough to crack if this rally runs out of steam as it appears to be doing at the moment.

Similarly equities and Gold have staged a small rally after falling yesterday but not convincingly enough to put the bears off the scent.

STOP PRESS : UK GDP just out shows +0.5% for Q3 and +0.5% year-on-year in line with forecasts. The Pound had a little sell-off but since bounced back to where it was.

So no USA markets today and we can expect London and Europe to have little appetite to take this anywhere but thin markets can mean additional volatility so no one will be getting too complacent just yet.

Today's Data:

09.00-EU- German IFO Business Climate Index

09.30-UK- GDP Q3 (Provisional)

12.00 UK- CB Industrial Trends Orders

US- Thanksgiving Day

Weekly Economic CalendarHERE

Interbank Rates as of 08:17 BST

Current Price

Overnight

High

Low

EUR/USD

1.3400

1.3407

1.3340

GBP/USD

1.5559

1.5567

1.5516

EUR/GBP

0.8612

0.8618

0.8588

GBP/EUR

1.1608

1.1644

1.1603

GBP/CHF

1.4274

1.4304

1.4245

GBP/AUD

1.5918

1.6044

1.5907

EUR/CHF

1.2292

1.2300

1.2269

GBP/HKD

12.0629

12.0690

12.0296

EUR/HKD

10.3918

10.4043

10.3312

GBP/ZAR

13.2430

13.3660

13.2174

USD/JPY

77.14

77.34

77.00

GBP/CZK

2.9753

2.9972

2.9720

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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