A new month but same scenarios in play

Tuesday 1 June 2021

Inflation and how CBs will deal with it or keep denying it, wobbly cryptos, lockdown easing fears adding to post-COVID recovery hopes are just three of the scenarios expected to keep playing out as another month unfolds.

Yesterday's thin liquidity markets saw some USD supply, possibly EOM related given equity markets strong performance over last few days, but reversals notable this morning amid variable risk sentiment as European trading gets fully underwa with Bitcoin delicately poised but equities having a good start to the day.RBA left rates and policy on hold as widely expected.

Jury on the Greenback still out so ignore the noise and, as always in these fickle times, be careful with your trading. Pick your preferred entry/exit levels and don't be greedy or over-analyze. Patience and discipline are key too of course.

GBPUSD: A good cap at 1.4250 and now dropping fast through 1.4200 as I type per my tweet with more bids lurking at 1.4180-85. EURGBP: Once again 0.8580-85 holding the retreats and helping to cap Cable but sellers still poised at 0.8620 so good two-way pips still whatever your bias. GBPJPY: Still failing around 156.00 with core pairs both capping and GBP coming under fire this morning but dip demand at 155.30 still while risk sentiment remains ok.

I remain a GBP rally seller across the pairs but still not getting over greedy with expectation on the retreats.

EURUSD: A good hold of 1.2180-00 but still capping around 1.2240 and some re-sells duly placed. Options in play today.USDJPY: Holding 109.30 in the latest retreat amid the USD supply but ranging still and sellers poised in the rallies again.EURJPY: 133.75 still forming a decent base amid the core pair dip demand and general JPY supply but sellers lurking around 134.00 again. USDCHF: Holding 0.8980 still as EURUSD caps again and EURCHF tests 1.1000 with the SNB ever vigilant/helpful but equally sellers now at 0.9010. EURCHF: Capped into 1.1000 again but some general EUR dip demand and SNB shadow keeping it underpinned

AUDUSD: Underpinned at 0.7730 yesterday amid the general USD supply but sellers lurking at 0.7770-80. A small wobble post-RBA but ranging still. USDCAD: Now holding 1.2030 after breaking down through 1.2060 on the softer USD/firmer oil tones and unable to get back above there so far

Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good week everyone.

Interbank rates: 08.50 BST

GBPUSD 1.4215

EURUSD 1.2232

EURGBP 0.8603

GBPEUR 1.1608

GBPAUD 1.8318

GBPCAD 1.7078

GBPJPY 155.60

GBPZAR 19.4897

GBPHKD 11.0093

USDJPY 109.74

USDZAR 13.7321

EURJPY 133.96

EURCHF 1.0987

EURHKD 9.4842

AUDUSD 0.7747

USDCAD 1.2033

USDCHF 0.8992