Coronavirus fears to the fore again
Monday 24 February 2020
Yes folks, in the ever fickle world of Forex we've seen more risk-off sentiment prevailing as the Coronavirus fallout continues to spread, and indeed accelerate now, with Italy and South Korea grabbing the headlines with further cases being reported at an alarming rate. Quite why this escalating threat/inevitability was ignored/glossed over at any recent point has been strange to say the least but the this latest addition to global fragility is not going away any time soon as I've repeated many times.
GBPUSD held into 1.2850 again on Friday and we've since been back up to look at 1.2980 amid Friday's better PMI data and general USD supply but now retreated to 1.2912 amid the risk-off GBPJPY and GBPCHF selling. Good 2-way business still whatever your bias.
EURGBP found support 0.8330-35 as GBPUSD turned lower and EURUSD found some dip demand of its own but still finding sellers between 0.8385-00. Month-end EURGBP in play this week with February being a short month. As I understand it the UK will continue to pay its monthly contributions during the transition period but that in turn will also be paying off the amount of financial settlement aka the Brexit divorce bill that is agreed. GBPJPY failed around 144.80 then 144.50 again and now posted 143.67 amid the risk-off plays with core pairs both finding sellers.
I stay poised to sell GBP rallies and buy back in the dips as ever.Still ranging overall.
USDJPY has continued its retreat amid the generally softer USD and risk-off plays to post 111.21 but we should still expect some dip demand after last week's rally. That large Yen supply a distant memory maybe but we should not expect any correction back into 110.00-30 to be as rapid as the ascent from there in the first place.EURJPY tightly bound as EURUSD finds some demand but with sellers also ever-ready.EURUSD has capped at 1.0860 with those rally sellers poised as I warned but also demand building at 1.0800 still with large option expiries between 108.00-15 tomorrow. USDCHF found support into 0.9760 with EURCHF still holding around 1.0600 and the SNB casting a shadow still but sellers on both pairs remain poised.
AUDUSD has found decent support at 0.6580, perhaps understandable given last week's rapid retreat and is proving quite resilient to the current AUDJPY supply but still capped at 0.6630. USDCAD has finally broken higher on softer oil prices and risk-off CADJPY selling and currently testing 1.3300.
Fickle Forex markets ever prevailing so be ready to jump on moves with your entry/exit levels and orders as always.
Another sad day at the hallowed Hall where we managed to lose again against another very average side in a comedy of errors that left only the opposition laughing. Better joy for England's rugby union boys though in a comprehensive victory over Ireland.
Have a good day/week out there one and all.
Interbank rates: 09.15 GMT