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  • Mike Paterson

Euro on the rise but jury remains out

Wednesday 7 April 2021

We've seen some strong EUR demand across the board in the past 24 hours helped by those large EURUSD options and softer US yields reducing the divergence along with reports of more optimistic tones on vaccine roll-out.

Some of the gains are being capped this morning understandably given the rapid turnaround in sentiment and some profit taking as the jury remains out. Risk-off tones prevailed yesterday with reported Russian moves around Ukraine (I warned to keep a eye on this in my Monday update) and we saw a rapid retreat in USDJPY and JPY pairs in general before running into some dip demand again especially EURJPY amid the happy-clappy EUR tones that saw the biggest daily rise in EURGBP in a very long while.

Lots of options interest again today in the mix for EURUSD and USDJPY partlcularly. Final UK Services PMI below prelims but the overall happy-clappy vaccine rollout/lockdown easing tones are all the algos were wanting it seems for an initial knee-jerk but GBP capping as I type and initial GBPUSD re-sells made at 1.3830 as EURGBP holds 0.8580. Jury has to be out after the moves of the past 24 hours.

As always in these fickle times be careful with your trading. Pick your preferred entry/exit levels and don't be greedy or over- analyze.

GBPUSD: The failure at 1.3920 was telling and down we've come to look at 1.3770 helped by the EURGBP demand and GBPJPY supply as per my tweets yesterday. Now back up to 1.3825 after highs of 1.3840 in this rally.EURGBP: It was up up and away all day amid the EUR grabbing and posted highs of 0.8625 before retrteating this morning. 0.8580 now a decent support line as per my earlier tweet. We shall see whether the EUR reversal higher continues after pausing and retreating a little. Go with the flow.GBPJPY: I've been warning for a while that sellers remain poised helping to cap rallies and yesterday they seized their chance on the Ukraine-led softer risk to break the back of the support on this pair and USDJPY. Caps at 153.50 proved telling but equally finding support at the old 151.30 pivot area so far.

I remain a GBP rally seller across the pairs but still not getting over greedy with expectation on the retreats. Nice when it happens though.

EURUSD: Underpinned by yesterday's large options at 1.1800-05 and enjoyed the EUR love-fest to post 1.1880 this morning and now finding a base at 1.1860 with more options in play today.USDJPY: Sellers,including me, prevailing again and finally getting some decent reward amid the softer risk tones yesterday. I hope the steer helped. Large options today in play and should helped contain.EURJPY: Found support yet again at 129.80 the softer risk retreat from 130.50 but now back through that line amid core pair dip demand.USDCHF: Finally breaking down amid the relentless EURUSD rally but EURCHF holding 1.1030 so far with the SNB ever watchful and ready to help.EURCHF: 1.1030 the latest line of support helped by the general EUR demand and SNB shadow.

AUDUSD: Broke up through 0.7660 after finding some options-led support but found 0.7680 a step too far and sellers jumpe back in.Still finding some dip demand though.USDCAD: Held 1.2540 this time but failing at 1.2620 amid the variable risk, USD and oil tones.

A well-battled point for the Shrimpers at Morecambe last night but after being 1-0 up it feels disappointing when a win was vitally needed. Six games left to stay up now.........

Let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates: 08.37 BST

GBPUSD 1.3798

EURUSD 1.1870

EURGBP 0.8601

GBPEUR 1.1624

GBPAUD 1.8078

GBPCAD 1.7408

GBPJPY 151.58

GBPZAR 20.0947

GBPHKD 10.6991

USDJPY 109.82

USDZAR 14.5417

EURJPY 130.39

EURCHF 1.1037

EURHKD 9.1917

AUDUSD 0.7635

USDCAD 1.2611

USDCHF 0.9295

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