Mike Paterson’s Daily Forex Brief
Friday’s eagerly awaited Non-Farm Payrolls came in above expectations at +171,000 and we saw the US $ find some decent support with the Euro taking the brunt of the move.
Adding to the Euro’s woes has been publication of a German newspaper report over the week-end that the ECB may have contravened its own rules by lending to Spanish banks on overly generous terms or even cases where collateral offered should have made them completely ineligible for loans.
The ECB admit they are investigating their actions and the market waits to see whether it’s incompetence or a deliberate attempt to overlook the detail where â‚¬80 billion in 18-month T Bills have been wrongly classified.
Meanwhile Spanish jobs data out this morning showed a rise of 2.7% in October, or 128,000 job losses, the third consecutive fall since the end of the tourist season.
So we’ve seen the Euro take another hit this morning with EURUSD breaking down through strong support at 1.2800 to a low so far of 1.2777 but we’ve seen the usual line-up of ACB buying interest on the dip to give a little support for the moment.
EURAUD and EURJPY have also been prime movers lower to 1.2338 and 102.56 respectively while EURGBP has had another look below 0.8000 (1.2500) and the strong support lines around 0.7985 (1.2525) but has given up again, for the moment at least.
GBPUSD has not escaped the $ buying either and has fallen back as far as 1.5983 before the buyers arrived to save the day as good technical support kicked in. Overall the Pound is a mixed bag as we start another week of fun and games.
Gold too has felt the full force of a resurgent greenback and had its biggest one-day fall in months to test the support at $1,665 that I anticipated and warned you of once $1,770 gave way on the 10th October. Like I say, I really don’t make this stuff up and I just hope you’re taking full advantage.
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Tomorrow sees the US Presidential Election and with both candidates in a with a real chance of victory traders won’t be factoring in anything until the results are in but the jury in any case remains out on the subsequent $ impact.
And the impact of the coaching merry-go-round at Sale Sharks seems to have been instant as they picked up their first win of the season, while the mighty Shrimpers squeezed in an FA Cup 1st Round victory ahead of the search for league points away from home tomorrow that I highlighted on Friday.
An eventful Abu Dhabi Grand Prix saw Kimi Raikkonen take the chequered flag as Lewis Hamilton was forced to retire once again. While in the post-race interviews the danger of seeking immediate live responses was apparent to all as David Coulthard was left deciding what was upsetting his cardboard cut-out karma the most, the choice words from the drivers not exactly ideal for Sunday afternoon viewing or his own much–treasured impeccable appearance being somewhat dishevelled by a showering of rose-water. Glorious!
Please stay safe this evening if you’re celebrating Guy Fawkes Night and have a good week out there.
Interbank Rates at 08:45 BST
Today’s Data: BST
09.30-UK- Services PMI
15.00-US- ISM Non-Manufacturing Index
03.30-AU- RBA Interest Rate Decision
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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 firstname.lastname@example.org
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.