Better risk sentiment greets the new week but ever fickle
Monday 16 November 2020
es folks, the happy clappy brigade are back/still in town as another week in the ever fickle world of Forex gets underway but the jury remains out.
Lots of headlines including talk of the FOMC acting to ease monetary policy further before 16 Ded meeting due to rising COVID concerns and Boris Johnson self-isolating over here but hey, help is on hand with a vaccine still looking to be rolled out by 1 Dec says the UK's Matt Hancock.
RBA's Lowe has just said that now is not the time for higher interest rates in Australia but no great surprises there nor do we have any (yet) from the latest, some say final, week or so of Brexit talks but we should expect some thrills and spills as the week progresses.
GBPUSD has looked at 1.3250 helped by some softer USD/firmer risk tones but retreated ans now below 1.3200 again as I finish this report. EURGBP has duly failed at the 0.9000 resistance again but still underpinned into 0.8950 and back up now at 0.8985 as GBP falls across the board.
GBPJPY found support at 137.60 and has rallied on some better risk tones but equally finding sellers at 138.50 and now below 138.00 again as the early Europe optimism runs a bit thin.
I stay poised to sell GBP rallies as my preferred side and buy back in the dips as ever.Patience continues to be a virtue and rally-selling in GBPUSD is still bringing some reward but entry level key as always. Definitely expecting dip demand still as I've said for a while now amid the current USD supply.Brexit remains very much in the room and the negative impact of COVID on the UK economy still in the mix.
USDJPY duly retreated further after failing at 105.20 on the softer USD tones and now capped at 104.80 with lows of 104.43 being posted as I type. EURUSD still finding good demand in the dips amid the softer USD/firmer risk and posted highs of 1.1868 but falling back as I type and still ranging overall. Large option expiries tomorrow at 1.1850 to keep in mind.USDCHF duly failed around 0.9160 again as EURUSD found a base and with EURCHF steady albeit capped with the SNB still ever watchful though and currently holding 0.9100.
AUDUSD has broken up through 0.7280 to test 0.7300 but finding some sellers again.USDCAD failed into 1.3180 and has retreated below 1.3100 on the softer USD/steady oil tones but holding as I type so far.
Markets are ever-fickle so don't forget to contact me if you need some further help.
A wonderful week-end of sport, not least of which the mighty Shrimpers getting an 88th minute winner at Walsall but also many congrats to Lewis Hamilton on his 7th F1 title and Dustin Johnson for an awesome four rounds of golf at Augusta what I always have regarded one of the great sporting occasions on the calendar, albeit this one in November rather than April.
Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good week one and all.
Interbank rates: 08.20 GMT