Mike Paterson’s daily Forex brief

I trust you all had a very enjoyable Easter week-end.

Back in the wonderfully fickle world of foreign exchange we’ve been up and down like the proverbial but not broken out of levels we discussed on Thursday.

It all kicked off on Friday with the release of weaker than expected US Non-Farm Payrolls which raised the spectre of QE3 once again and we saw traders scrambling to sell a few of the Dollars they’d bought prior. EURUSD broke back up through 1.31 to test resistance around 1.3150 while GBPUSD found support around 1.5860 and moved back through 1.5900 to test a few sell orders around 1.5940.

However Chinese trade data released overnight came in at +$ 5.3 billion far exceeding forecasts (I’ve said before they can tend to be a bit imaginative with their figures!) and it was time to buy some Dollars again. All change, and we went back down to 1.3072 and 1.5851 respectively from where we’ve recovered a little in the past few hours but basically come to a grinding halt again. The Chinese Premier has said they will announce measures tomorrow to stimulate their economy which we will await with great interest.

This bearish Euro tone will remain just as long as fears persist over sovereign and bank debt. Were it not for concerns over US monetary easing then we’d be seeing EURUSD a lot lower by now.

In all this EURGBP has been a mere bystander and we’ve seen a tight range of 0.8230-60 (GBPEUR 1.2105-50) so far. Overall the Pound has been another mixed bag with a few gains and a few losses (see rate table below) but nothing of note.

Overnight the Bank of Japan left interest rates on hold and took no further measures to ease monetary policy which gave USDJPY a nudge back down again after trying to climb back over 82.00.

Stock markets have had another wobble after Friday’s US jobs data and we’ve seen another cap in the price of Gold after its own decent rally to $1662.

So, plenty of ways this can all pan out in another short week with many traders still away on hols and it remains a coin-flip on present evidence.

Forex Update-The Economic Voice Limited

Forex Update-The Economic Voice Limited

Not that a coin was needed to seal England’s well-deserved victory in the Second Test in Sri Lanka despite making hard work of it at times. Which can also be said for the Shrimpers week-end, losing 2 men and by 2 goals on Friday against lowly Bradford then earning a much needed 3 points at home yesterday. Plenty more interesting results in the other football leagues as the season heads into the final furlong. Bubba Watson earned his first green jacket at The Masters golf as once again we saw the usual last day implosion from the leaders and my hot tip Justin Rose did himself proud, unlike everyone else’s hot fave Mr Woods.

Hey ho, another holiday week-end over for many of us and it’s back to the daily grind eh?

Have a good week out there and feel free to get in touch to discuss any FX matters on your mind.

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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