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  • Mike Paterson

A new month but same uncertainty.

Wednesday 1 July 2020

Lots of mixed month/quarter-end flows yesterday as I warned but we didn't get the JPY demand that was reported to be a feature. Perhaps the late-month retreat in equities had an impact in the end even though they finished higher on the final day producing some risk-on sentiment to add to the mix.


GBPUSD held 1.2250 again and made steady gains into the 4pm London fix and more after helped by the GBPJPY risk-on demand but failed around 1.2400 where I warned yesterday we had larger offers and where we just happen to have GBP510m expiries today and re-sells have duly been placed. EURGBP duly retreated and now testing 0.9050 (GBPEUR up to 1.1040) as month-end demand diminished. I did warn yesterday that "we may have seen most of the rally" and so it proved with GBP generally getting a lift across the board too. My sells previously into 0.9150 and 0.9175 proving prudent. GBPJPY held 132.00 yet again and enjoyed the month-end/risk-on rally to test 134.00 before retreating only to hold 133.00 amid variable risk in Asia/early Europe.


I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. I expect to continue seeing some dip demand but cross-flows and Brexit will produce a mixed bag still.


USDJPY has seen a round trip from 107.55 to 108.16 and back again amid all the month-end mayhem and

EURJPY has had a round trip of its own from 120.60 to 121.50 and back on the firmer risk sentiment then reality check as USDJPY failed above 108.00.


EURUSD duly found support into 1.1185 where I warned we had those large option expiries and was contained on the top side by the equally large expiries between 1.1240-50 before breaking higher into the 4pm fix helped by the EURJPY demand but tempered by the EURGBP supply and re-sells duly placed. Support found again around 1.1220 so far.USDCHF capped at 0.9530 and fell as EURUSD rallied but holding 0.9440 still with the SNB ever vigilant in the dips.


AUDUSD based ar 0.6840 yet again and has needed little encouragement to enjoy a decent risk-on/month -end rally to break 0.6900 and post 0.6917 as I type with large demand building at 0.6880.USDCAD has found a latest base into 1.3550 after a solid retreat from 1.3700 again amid the month-end flows and firmer oil price which saw 90% gains in the latest Quarter.


Lots going on right now, and the foreseeable future, so don't forget to take advantage of my 1-2-1 mentoring sessions if there's areas of trading these volatile markets or how to make best use of the order boards and expiries, that you might need some further help with.


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


Interbank rates:  08.34BST

GBPUSD   1.2384

EURUSD   1.1228

EURGBP   0.9065

GBPEUR   1.1030

GBPAUD   1.7924

GBPCAD   1.6787

GBPJPY   133.30

GBPZAR   21.3588

GBPHKD   9.6013

USDJPY   107.64

USDZAR   17.2305

EURJPY   120.87

EURCHF   1.0636

EURHKD   8.7047

AUDUSD   0.6908

USDCAD   1.3554

USDCHF   0.9473


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