Better risk sentiment but FX pairs ranging still
Tuesday 25 August 2020
Equities and risk sentiment received a boost in Asia following some positive vibes on the US-China trade talks and those risk-on tones have carried on as European trading gets underway.
As I said yesterday there's lots of good two-way business still at the moment amid the variable USD sentiment as we wait on the Jackson Hole virtual symposium this week with Powell speaking on Thursday at 13.10 GMT. Early month-end flow forecasts are USD-negative again generally at this stage but inconclusive with a few days still to go.
GBPUSD has seen another 1.3050-1.3150 round trip before finding the usual dip demand once more. Rinse n repeat until we break out of the range. EURGBP found sell interest into 0.9050 and retreated to test the 0.9000 support again in Asia before posting 0.9037 this morning in Europe. Dip buying remains evident as we head into month-end but all ranging still.GBPJPY has found a base at that 138.30 area again and made a steady path higher to 139.20 as I type amid the better risk tones.
I stay poised to sell GBP rallies overall as my preferred side and buy back in the dips as ever.Patience will continue to be a virtue and entry level key as always. I still expect to continue seeing dip demand though as we continue to range.
USDJPY found a base at 105.70-75 and now up to 106.35 amid the better risk/firmer USD tones so far in European trading. EURJPY also making good gains this morning amid the better risk and USD sentiment to post 125.75.EURUSD has found support at 1.1780 after the failure into 1.1850 with EURCHF, EURGBP and EURJPY all higher again too but sellers poised as ever. USDCHF capped at 0.9125-30 this time where I noted offers yesterday and now posting lows of 0.9093 as I type.
AUDUSD capped again around 0.7200 (helped by a decent defence of some large AUDNZD 1.1000 expiries and now down to 0.7160. USDCAD found a decent base into 1.3130 but has capped again at 1.3230 so far this morning helped by firmer oil and CADJPY demand but underpinned by some general USD buying.
Markets are ever-fickle so don't forget to contact me if there's areas of trading these markets 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.
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