ECB fail to deliver for the doves
Friday 11 September 2020
9/11 - We will/must never forget
Firstly we should mark today's date and 19th anniversary of the awful tragedy and loss of life that occurred on 9//11. I lost friends from Cantor Fitzgerald that fateful day and it always serves to remind me, amongst other sad events, that we need to keep everything, including FX trading, in perspective. We will/must never forget. RIP to all who perished.
Lagarde had plenty of chance to talk down the Euro yesterday but refused/failed to do so, instead just rolling out the usual mantras. I hope my sell rumour/buy fact steer in my preview helped you all. Lane has put his own concerns forward again this morning but we had already seen the Euro retreat from yesterday's post-ECB highs and the jury remains out. Today sees a host of ECB speakers between 08.50-12.30 GMT so keep your eyes on the newswires.
The Pound has resumed its retreat amid fresh Brexit spats with the EU and fresh COVID restriction measures and although we've seen a little bounce from yesterday's lows helped by some generally better UK data earlier it still remains on the back foot for the moment
Market risk sentiment still fragile overall. US CPI the next major data release at 12.30 GMT.
GBPUSD has continued its retreat to post lows of 1.2774 and rallies should still be limited in the current scenario but we need to keep an eye on any fading momentum and EURGBP still as the ECB Euro debate will continue to be an elephant in the room.
EURGBP did indeed remain underpinned between 0.9070-80 as I highlighted yesterday and needed little excuse on the Brexit wobble/ECB not-so-dovish double whammy to burst higher to 0.9270 helping to push GBPUSD further down along the way. We've since found a base at 0.9220 and now bursting higher agin to 0.9290 ss I type. Dip buying remains my preferred strategy overall.
GBPJPY found a cap at 138.20 and found itself tumbling to 135.60 amid the softer risk and GBP selling double whammy. Capping at 136.60 since but holding 135.50 for the moment.
I stay poised to sell GBP rallies as my preferred side. Patience continues to be a virtue and entry level key as always. I still expect to continue seeing GBP dip demand though and we need to be wary of this current move getting over-stretched and not get complacent.
USDJPY has traded back in the 106.00-50 range amid variable risk and USD sentiment and little to shake it out too far just yet. EURJPY has bids at 125.20-25 still and holding the falls so far. EURUSD enjoyed the ECB reprieve but failed at 1.1920 again and retreated into 1.1820 before bouncing again this morning to post 1.1865. USDCHF found a base this time at 0.9050 as EURUSD retreted but with EURCHF holding steady we've seen a drop back below 0.9100 afterfailing around 0.9110.
AUDUSD duly failed at 0.7320-25 and been down to test 0.7250 amid the variable risk only to bounce back up to 0.7300 as I type. USDCAD found a decent base at 1.3120-30 but equally can't get back above 1.3200 amid the variable risk/oil play.
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. Have a great week-end.
Interbank rates: 09.55 BST