Mike Paterson’s daily Forex brief

Welcome to a new week and the US Dollar is still suffering from last week’s surprise Bernanke/FOMC rhetoric that signalled further monetary easing against expectations following my warning that Mr B can throw surprise parties with consummate ease.

Throw in the on-going Eurozone debt concerns with focus still on Spain following their downgrade and we’ve got the proverbial mixed bag still with the Pound hanging onto most of its recent gains while advancing versus the Euro and Greenback.

EURUSD has been up to 1.3267 overnight but GBPUSD has had the bigger move and looking to test 1.6300 as I type. EURGBP dipped below the key resistance at 0.8140 at the end of last week and has now tested another decent support line at 0.8125. (GBPEUR up to 1.2311).

GBPCHF has been up to test 1.4800 but GBPAUD is finding another cap for the moment as the Aussie makes its own advance against the retreating USD.

USDJPY has also been sold despite last week’s additional easing by the BOJ which obviously didn’t go as far as the market was expecting and we’ve been down to test strong support at 80.00. The impact of this Yen strengthening has of course spread into other pairs further confusing the picture.

Seems like the UK government is a little Teflon-coated at the moment while attention remains elsewhere, but with poor economic data and more revelations to come from the Leveson inquiry and related matters surely this can’t continue.

Not much up in the way of data today but tonight sees the latest RBA Australian interest rate decision. Most commentators are going for a 25bp cut but some are suggesting that a bigger cut of 50bp may well be on the cards. All will be revealed tonight.

Forex Update-The Economic Voice Limited

Forex Update-The Economic Voice Limited

As will the English Premier League outcome when, allegedly, there’s a big match going on somewhere up North. More importantly we have to wait ‘til Saturday to see whether the mighty Shrimpers can yet snatch an automatic promotion place from League 2 after results went our way on Saturday. It’s the waiting Sarge……..

And talking of which it seems we haven’t got to wait much longer to hear who the new England manager is going to be, and it won’t be our ‘Arry but Mr Roy. The FA does indeed work in strange ways but seemingly looks like it has run out of money to cover even more compensation payments… Hey ho…

Today’s Data:

10.00-EU- Eurozone CPI

13.30-US- Core PCE Price Index / Personal Income & Spending

02.30-AU- RBA Interest Rate Decision

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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