Another risk sentiment wobble notable
Thursday 15 July 2021
US Treasury yields falling again as are equity and commodity markets as we see yet another risk-off scenario playing out which suits my ongoing trading strategy and I hope the steer has helped. This latest move follows a spike in risk tones after Powell's testimony statement left the hawks a little bemused.
Also yesterday the BOC tapered by C$ 1bln per week which was at the bottom end of expectations and we've seen CAD selling in the aftermath and BoE Governor Bailey says he won't be rushed into an interest rate decision despite rising inflation and that's helped a additional fall in the Pound after being given a kick lower by the risk-off GBPJPY supply despite a reasonable jobs/wages report.
Patience and discipline in trading are key as ever and not being greedy as we continue to range tightly overall but good to see some greater levels of intra-day volatility return.
GBPUSD: A good cap between 1.3880-00 and re-sells duly placed with pips banked into 1.3850 and at 1.3820 per my tweets. EURGBP breaking up through 0.8530 to test 0.8560 and GBPJPY selling also helping to cap GBPUSD. Good two-way jobbing pips whatever your bias. I remain a rally seller while keeping an eye on EURGBP and GBPJPY as always.
EURGBP: A good hold of 0.8500 and we've seen a decent rally back to test 0.8565 as GBP looks soggy and EURUSD finds decent dip demand again in the current rollercoaster of sentiment. Rally sellers poised again though.
GBPJPY: A steady retreat to 151.60 amid the softer risk tones and general JPY demand helping to cap core pairs and drive them lower.
I remain a GBP rally seller across the pairs but being patient as ever. Risk to the downside though still overall.
EURUSD: A good base at 1.,1780 then 1.1800 then 1.1820 as USD supply returned post-Powell and the Fed-ECB disaparity narrowed creating a boost to the pair. Now testing 1.1850-60 again.
USDJPY: A further retreat from 110.60 to test 109.75-80 amid the softer risk tones but ranging overall still.
EURJPY: 129.80 support line now but rally sellers poised at 130.20-30.USDCHF: A further retreat amid some risk-off CHF demand and the general USD supply with the SNB ever vigilant still. EURCHF: Support line now a little lower again at 1.0800 with SNB shadow/help ever present but rally sellers still poised as I've been warning despite the Euro's recovery elsewhere.
AUDUSD: A retreat again from 0.7485 this time with that very large option interest at 0.7500-10 today very much in play but 0.7450 holding the retreat this time. AUDJPY moves having an impact too of course.USDCAD: Yesterday's BOC decision meant the algos sold on the headline but with the taper at lower end of expectations we saw a sharpy spike back to and above 1.2500 where we have those large options lurking tomorrow too.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.50 BST