Better risk sentiment bringing more Greenback supply
Wednesday 29 April 2020
Rightly or wrongly markets are still feeling in a more upbeat mood with equities and oil both finding some demand and once again we are seeing USD supply across the board. Early indications suggest month-end flows are USD negative and that's adding to the sfoter tones too.
Having said that we're still seeing some good two-way business and there's definitely opportunity both sides of the price if you don't get geeedy.
GBPUSD yesterday rallied to test strong lines of resistance/offers around 1.2520 and re-sells were duly made . Now a new line of support at 1.2420.EURGBP is holding around 0.8700 again with EUR600m expiries there today and 530m at 0.8675 and that's helping to cap GBPUSD too as per my Tweets earlier this morning. Now testing 0.8735 (GBPEUR down to 1.1440) again as I type with the usual month-end EUR demand also helping to provide some support. GBPJPY capped at 133.60 and now falling through 132.50 helped by the GBP supply and USDJPY breaking down through 106.50.
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.
USDJPY finally gave up on 107.00 only to hold 106.50 then rallying back into 107.00 before now retreating again and breaking 106.50. EURJPY has held 115.50 on its latest retreat but capping at 115.80 atm with core pairs both finding sellers. EURUSD remains underpinned into 1.0800 amid the softer USD but equally finding sellers into 1.0900. USDCHF is finding dip buyers around 0.9720 again with EURCHF holding 1.0540 after finding sellers above 1.0600 but with SNB still supporting in the dips.
AUDUSD has rallied once more to post 0.6547 on the USD supply combo after being supported by large option expiries that roll off today. Large expiries tomorrow at 0.6570, which is also a decent technical level, the next target.GBPAUD continues its slide and now posting lows of 1.9045.USDCAD capped around 1.4050 and since broken down through 1.4015-20 to test 1.3930 on the USD supply/firmer oil combo.
Have a good day everyone and let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.20 BST