A little risk returns after G20 but markets still fragile
Monday 3 December 2018
We're not breaking out of recent ranges but there's been a little risk-positive sentiment return post-G20 on some upbeat tones from the US-China trade talks. Some general USD selling currently prevailing as European trading gets underway with Brexit still hogging a lot of the headlines.
GBPUSD continues to hold around 1.2720-30 and this morning has been up to 1.2824 on the risk-on/USD selling combo but the rally was once again short-lived with the pair retreating again as I type. Big week coming up on all things Brexit and that kicks off today in parliament when Attorney General Geoffrey Cox makes a statement on the legal advice that May & Co received.He will only reveal a reduced version though and that understandably is causing some concern and anger on all sides.His statement to the House of Commons will be followed by five days of debate on the deal.
Immediate offers between 1.2820-30 then 1.2850, 1.2880 and 1.2900 again with bids/demand now into 1.2780, and 1.2750 then the decent line at 1.2720-30 still and larger at 1.2700, 1.2680 and 1.2650.I remain GBP bearish overall and happy to jump on rallies then buy back in the dips while remaining core short, a strategy that continues to work well.
EURGBP understandably fell back a little after the month-end rally assistance but remains underpinned at 0.8850 with larger buy interest at 0.8830 and 0.8800 still. Sellers now at 0.8900 then 0.8920 still and 0.8950.
EURUSD has also capped again, this time at 1.1380 but equally continues to find dip demand amid all the variables out there right now. Decent offers at 1.1380 then 1.1400 and 1.1420 still with more behind that at 1.1450 again.Immediate demand/support now around 1.1350 then 1.1330 and 1.1300 again.
USDJPY is also still tightly bound between 113.30-80 with the initial post-G20 rally being sold into once again. Bids building still building between 113.20-30 that I've been highlighting then 113.00 and 112.80 with sellers into 113.60 then 113.80 and 114.00 still. I remain a rally seller buying back in the dips with decent 2-way business to be had.
USDCHF rallied again but failed at 1.0000 area with EURCHF also rising but capping at 1.1350. Sellers remain poised on both though even if the SNB will still look to "smooth" the declines.Bids/support now at 1.1300 and 1.1280 with USDCHF demand building between 0.9950-60 then 0.9930 and 0.9900 again. Sellers poised at 1.1350-60 still as I warned on Friday and 1.1380 with USDCHF supply at 1.0000 and 1.0020 again. I'm happy to trade both sides of the price action at the moment in these tight ranges.
AUDUSD spiked on the Asian opening with the US-China trade feelgood vibe prevailing but has capped at 0.7400. Decent bids now at 0.7350 then 0.7320 and 0.7300 still with sellers at 0.7400, 0.7420 and 0.7450. USDCAD has fallen back to 20 November lows of 1.3160 on the USD selling and generally higher oil prices. Buyers now lining up at 1.3150 then 1.3120 and 1.3100 with sellers poised at 1.3200, 1.3220 and 1.3250.
Fickle Forex markets ever prevailing so get your orders in to take full advantage of these moves.
On Saturday the FA Cup dream disappeared once again for the currently not-so mighty Shrimpers of Southend United amid an indifferent display and awful refereeing. Hey ho, now we can focus on other matters. Onwards and upwards always!
Have a good week out there one and all.
Twitter: @MSPFX and @MikePatersonFX
Interbank Rate 08.22