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  • Writer's pictureMike Paterson

Did someone mention fragile sentiment prevailing ?

Tuesday 14 May 2019

I make no apologies for banging on about it but on-going spats in the US-China trade talks, stand-off on Brexit, increasing tensions in the Middle East are just three scenarios still playing out in financial markets right now and risk-off sentiment continues. It seems the only certainty is the increasing level of uncertainty.

GBPUSD has finally broken down through support between 1.2980-00 and 1.2960 helped by GBPJPY and GBPCHF supply to test the next tranche at 1.2930, all levels that I have been highlighting,having failed above 1.3030 again. We now wait on UK jobs/wages data at 08.30 GMT but markets mostly focused elsewhere.

EURGBP dip-buyers have been prevailing again on the GBP supply and the pair has now posted fresh recent highs of 0.8693 (GBPEUR down to 1.1500).GBPJPY has duly retreated once again and remains a key driving force in both directions on the renewed risk-off sentiment/GBP supply which has has also seen USDJPY fall to test 109.00

I remain GBP bearish overall and continue to rally-sell as my preferred strategy and buy back in the dips amid all the global uncertainty/indecision including Brexit. Plenty more noise to come this week and the algos will continue to feed off the headlines. Someone recently complained that I don't change my view but I'm consistent as least.

EURUSD continues to find itself tightly bound amid all the EUR/cross activity and good-size option expiry interest with more today at 1.1240 while USDJPY fell to test 109.00 bids/support on the risk-off Yen demand but has staged a decent rally helped by some general USD demand. Definitely a case of rinse and repeat still for now. USDCHF also duly retreated amid the CHF demand and as EURUSD remains underpinned but with EURCHF breaking lower again with the SNB seemingly biding their time but I wouldn't rule out a bit of interest from them at 1.0050 and 1.1280-85.

AUDUSD has also broken lower with US-China trade concerns ever-present to feed the algos but finding support into 0.6930 support so far while USDCAD is still making its mind up and tightly bound with CAD/JPY two-way business versus firmer oil price-led CAD demand.

Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

Have a good day/week out there one and all.

Interbank Rate 08.28

GBPUSD   1.2937

EURUSD   1.1233

EURGBP   0.8688

GBPEUR   1.1510

GBPAUD   1.8600

GBPCAD   1.7403

GBPZAR   18.4472

GBPHKD   10.0301

USDJPY   109.74

USDZAR   14.2583

EURJPY   123.25

EURHKD   8.7143

GBPJPY   141.82

AUDUSD   0.6948

EURCHF   1.1318

USDCAD   1.3467

USDCHF   1.0077

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