• Mike Paterson

Euro tumbles as ECB disappoints the hawks

Yesterday the European Central Bank left interest rates on hold as expected but remained very cautious on further tightening despite much conjecture to the contrary prior. Last week I warned during the Euro rally to beware the hype and that we could well see a sell-the-fact retreat come the actual event. Well yesterday we got one, and some.

EURUSD has fallen fast, triggering many stops along the way once 1.1730 broke, to post lows of 1.1540 helped by some general US$ buying too. Some dip demand down there has seen a small rally into 1.1600 this morning.Buyers now around 1.1550 then 1.1530 and 1.1480-00. Sellers around 1.1600-110 then 1.1630 1.1650 and 1.1675-80.

EURGBP has been down to test 0.872-30 support (GBPEUR up to 1.1465) and holding there for the moment. More buyers poised at 0.8700 then 0.8680-05. Sellers between 0.8750-60 again then 0.8780-00.

GBPUSD also fell steadily amid the USD demand to post 1.3250 having tested the 1.3450 resistance line earlier in the morning after strong UK Retail Sales data. We've since had a look at 1.3200 since but back up through 1.3250 as I type.Immediate support/buying now into 1.3220 and 1.3200,then 1.3185 and 1.3150-60. Sellers into 1.3300 then 1.3350 and 1.3380-00. Keep selling those rallies but don't get greedy after such a decent fall.We're still ranging amid all the noise and hype as I keep saying.

USDJPY has rallied through 110.50 to post 110.91 but gave up battling the decent sell interest up there and been back below 110.50 this morning. Buyers now around 110.30 then 110.00 and 109.80 and 109.50. Sellers still between 110.80-00. USDCHF has also rallied to look at 1.0000 as EURUSD retreated after failing into 0.9900 dips tempered by some EURCHF buy interest now below 1.1600.

The Aussie, NZ and Canadian $ have all fallen to follow on from my comment yesterday that they were looking a little fragile.AUDUSD now has buyers at 0.7450. 0.7430 and 0.7400.Sellers at 0.7480 0.7500 and 0.7530. USDCAD buyers now around 1.3100 then 1.3060. Sellers around 1.3160 then 1.3180 and 1.3200

Fickle and fragile markets prevailing still so get your orders in to take full advantage of the moves.

World Cup underway and the sun is shining. What's not to like?

Have a good day and week-end out there one and all.

Interbank Rate 08.35 BST GBPUSD   1.3251 EURUSD   1.1588 EURGBP   0.8745 GBPEUR   1.1434 USDJPY   110.49 USDCAD   1.3134 USDCHF   0.9968 GBPAUD   1.7762 GBPCAD   1.7408 GBPCHF   1.3213 GBPZAR   17.7365 GBPHKD   10.2727 EURHKD   8.9844

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