Crazy days continue
Thursday 7 January 2021
Crazy and extremely sad scenes in the US yesterday after Trump supporters stormed the Capitol building in a riot that has seen four people die. Markets are still making their mind up but we have just been told that Biden has duly secured enough votes to confirm his presidency from 20th Jan so will be veering back toward the already known outlook. Trump has just made a statement to say there will be an orderly transition but the damage has sadly already been done.
We live in disturbing times on so many levels. Let's hope that Biden's term at the White House brings a more peaceful and constructive period for the US at the very least.
Some good two-way FX business to be had though still as the jury remains out with price action fragile within recent ranges so continue to be patient but not greedy on your entry/exit levels.
GBPUSD duly based into 1.3550 again yesterday before rallying back to 1.3633 then momentum faded omnce again. Rinse n repeat for the moment. EURGBP has been tightly bound within 0.9030-80 (GBPEUR 1.1015-75) and testing the bottom of that range again (GBPEUR up to 1.1070) as I type on the current retreat. GBPJPY held 139.80, then 140.00 then our old pivotal friend 140.20-30 and now testing 140.80 now led by better risk/core pair dip demand.
I still have a naturally bearish stance on GBP overall and remain poised to sell into rallies but respecting the current vagaries also. Range trading still for the moment.
USDJPY duly held the bigger support at 102.60 again and now broken up through 103.30 again and still looks underpinned for the moment amid better risk sentiment but also some Japanese COVID-led JPY selling. EURJPY has now found a base at 126.80-00 again amid the JPY selling outweighing EURUSD rally sellers and now testing 127.30.
EURUSD capped at 1.2350 again amid some general USD demand but support remains into 1.2250.USDCHF duly held around that 0.8760 area for the moment with the SNB ever watchful and helping EURCHF stage another decent rally to breach 1.0830 as it rallies to test 0.8830 again helped by the EURUSD retreat.
AUDUSD capped at 0.7820 and now testing 0.7760 this time on its latest retreat while USDCAD based at 1.2630 but capped this time at 1.2730 but held 1.2660 on the retreat before bouncing to look at 1.2700 amid some general USD demand and oil off its tops.
There's little doubt that we live in strange times and rationale was thrown out the window a long time ago so as we look at trading opportunities to begin the year it's even more important not to over analyze but trade the price action with discipline and patience.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.30 GMT