Mike Paterson’s daily Forex brief
Another mixed bag but generally there’s been appetite for risk again with the US $ bearing most of the brunt, ahead of key US non-farm jobs data tomorrow, while equities and gold also find favour.
GBPUSD was the first to make any sort of move and having initially capped just below the 1.5800 option and technical resistance it did finally break up through and we got the accelerated move higher once 1.5810 was breached which I suggested yesterday. We saw a rapid rise to 1.5867 and then to 1.5883 before settling back around 1.5850 for most of the day.
This move definitely was as much about squeezing out some large short positions as it was any leap of faith in the UK, borne out by the fact that apart from EURGBP falling back to 0.8306 (GBPEUR 1.2040) from early gains to 0.8344 (1.1984) we’ve seen little overall improvement in the Pound. Jury’s out now on whether this is a start of a move to test 1.60 again or the last hurrah before sliding back to 1.55. I think we’ll know soon enough.
EURUSD did make one sortie above 1.3200 but failed to make further headway and was soon back to 1.3145 before finding fresh buyers and this also put the brake under EURGBP and EURJPY and we’ve seen some more EUR demand in early European trading.
The big winner again has been the Aussie $ spurred on by good domestic and Chinese data and AUDUSD is now back to highs last seen in August around 1.0740
Some key data out today starting with UK Construction PMI at 09.30 GMT and this afternoon we have testimony from US Fed Chairman Bernanke and we’ll recall the chaos and mayhem that happened when he spoke last week. And we of course we can’t forget the on-going Greek haircut debacle/talks.
Could be a lively day folks!
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