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  • Writer's pictureMike Paterson

Euro strength notable amid mixed markets still

Tuesday 14 July 2020

Risk sentiment continues to be fragile but variable and FX price action ever-fickle with the latest move of note being some Euro demand/short-covering as we head into the EU Summit on 17/18 July.

Yesterday saw EUR pairs breaking higher across the board, triggering stop-losses along the way given the recent moves low and forcing shorts to cover some exposure. Large EURUSD expiries today above 1.1300 also in play. EURGBP duly found some dip demand and rallied to 0.9055 helping to push GBPUSD lower with the latest UK GDP data released earlier this morning only adding to the pressure.

GBPUSD has so far found support into 1.2500 after its retreat from 1.2650 and holding steady around 1.2525 s I type.EURGBP broke up through the 0.8985-00 sell interest triggering stops through the 0.9000-10 pivot area as the Euro demand gathered momentum to post highs of 0.9070 this morning and is still underpinned as I type. Some sell interest into 0.9200 again but support building at 0.9020-30. GBPJPY failed this time at 135.40 and we've back down to look at 134.20 so far amid some softer risk plays and general GBP supply.

I stay poised to sell GBP rallies overall as my preferred side and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. I still expect to continue seeing some dip demand but cross-flows, risk sentiment and Brexit will continue to see a mixed bag as we've been witnessing.

USDJPY held above 107.00 on some further USD demand and better risk but Yen buyers on softer-risk this morning still tempering rallies above 107.30.EURJPY found support at 121.00 and enjoyed the Euro demand ride higher but capped into 122.00 as EURUSD found some rally supply eventually and softer risk tones returned. EURUSD enjoyed the Euro-positive ride higher triggering stops along the way before running out of steam into 1.1380 but the pair remains underpinned into 1.1320 for the moment where we have large expiries today. USDCHF failed at 0.9440 and fell to test 0.9400 as EURUSD rallied but EURCHF demand tempered further losses and with the SNB ever vigilant in the dips.

AUDUSD still ranging amid the latest COVID resurgence in Melbourne and the threat of Chinese economic retaliation ever lurking but finding dip demand again round 0.6930 after another failed attempt on 0.7000. USDCAD has rallied on a firmer USD/softer oil price combo to break above 1.3620 but capping at 1.3650 so far.

Trading ranges may be tight and marklets ever-fickle but good two-way pips to be had so don't forget to contact me if there's areas of trading these markets or how to make best use of the order boards and expiries, 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.

Interbank rates:  08.45 BST

GBPUSD   1.2520

EURUSD   1.1335

EURGBP   0.9050

GBPEUR   1.1046

GBPAUD   1.8056

GBPCAD   1.7070

GBPJPY   134.34

GBPZAR   21.0745

GBPHKD   9.7068

USDJPY   107.27

USDZAR   16.8335

EURJPY   121.62

EURCHF   1.0661

EURHKD   8.7876

AUDUSD   0.6937

USDCAD   1.3630

USDCHF   0.9405

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