Mike Paterson’s Daily Forex Brief
With the German Constitutional Court yesterday giving the nod to ESM, but with a few conditions, attention now turns to expectations of the US Fed introducing further monetary easing with this evening’s FOMC statement.
Traders have continued to work on the facts of Fed Chairman Bernanke’s recent rhetoric and the still ensuing weak economic data to conclude that he will introduce QE3 tonight and perhaps some more definitive stance on low interest rates to remain until specific economic conditions prevail.
Ahead of what is arguably the most anticipated decision of the year EURUSD has continued to stay well supported with highs thus far of 1.2932 and EURGBP edging higher to 0.8026 (GBPEUR down to 1.2457) despite a dip to support lines around 0.7970 yesterday.
Support for EURUSD now comes in at 1.2900, with further bids lined up between 1.2850-80. Sell orders are in place between 1.2930-50 and more above 1.2980 ahead of another barrier option at 1.3000. Offers on EURGBP are lining up at 0.8030, ahead of large technical resistance at 0.8045 (July 5th high). Support still at 0.7970.
GBPUSD is currently sitting above 1.6100 with support at 1.6080 and 1.6035. Sellers lined up at 1.6135-50.
The SA Rand has taken a bashing on weaker current account data and increasing labour unrest in the crucial platinum and gold mining sectors. GBPZAR has jumped above 13.50.
But it’s all eyes on the US and FOMC announcement at 17.30 BST.
Stop Press: USD weakening further as reports come in of demonstrators setting fire to the US Embassy in Yemen.
Only one sports story of note to report this morning, and that’s the shameful and appalling revelations about the South Yorkshire police, and possibly Margaret Thatcher’s government, covering up their woeful behaviour at, and since, the tragic Hillsborough disaster of April 1989, in which 96 football fans died. Sadly the truth will not bring back the dead but we must hope that justice will now be done.
Interbank Rates at 08:35 BST
Today’s Data: BST
09.00-EU – ECB Monthly Report
13.30-US – Core PPI / Weekly Jobless Claims
17.30-US – FOMC Interest Rate Decision / FOMC Statement
19.15-US – Fed Chairman Bernanke speaks
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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 email@example.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.