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  • Mike Paterson

Euro underpinned still amid firmer risk tones

Thursday 23 July 2020

Markets are in happy-clappy mode again and the Euro is still finding favour in the wake of the EU Summit agreement for 750bln even there's plenty of debate still going on in the aftermath. The Pound meanwhile is ranging still and providing good two-way price action amid the generally softer Greenback and firmer commodity currencies.

COVID, US-China tensions and Brexit continue to cast a shadow but markets shrugging it all off again for the moment.

GBPUSD has mostly traded within the 1.2650-1.2750 range and provided excellent two-way pips. Re-sells now duly placeD into 1.2750 as per my earlier Tweet but still expecting decent dip demand. EURGBP found good demand into 0.9080 after failing above 0.9130. Month-end demand looming to add to the general Euro love-fest atm. Resistance now at 0.9135 again then 0.9150 still.GBPJPY duly held 135.30-40 and since enjoyed the better risk/core pair dip demand to post 135.60 before slipping back as I type.

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 has rallied on the firmer risk Yen selling but tempered into 107.30 by the general USD supply.

EURJPY found support into 123.00 then 123.80 but failing into 124.30 again this morning but core pairs both finding dip demand still. EURUSD continues to enjoy the current Euro love-fest/softer USD combo and having taken out found decent sell interest at 1.1550 has now challeged the 1.1600 barrier option but not breaking higher albeit with demand building at 1.1570. USDCHF broken down through 0.9300-20 as the relentless EURUSD rally continued but finding a little support into 0.9270 this morning as EURCHF still underpinned with the SNB ever vigilant in the dips.

AUDUSD has been up to test decent offers at 0.7180 amid the softer USD/firmer commodity plays before finally retreating. Large AUD expiries on AUDNZD at 1.0695 today, mostly AUD calls, certainly in play too. USDCAD capped at 1.3480 where I warned of offers building yesterday and resumed its retreat amid the softer USD/firmer oil price combo to now test 1.3380.

Markets are ever-fickle but good two-way pips to be had so don't forget to contact me if there's areas of 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.

Interbank rates:  08.18 BST

GBPUSD   1.2722

EURUSD   1.1579

EURGBP   0.9102

GBPEUR   1.0985

GBPAUD   1.7791

GBPCAD   1.7030

GBPJPY   136.25

GBPZAR   20.9049

GBPHKD   9.8642

USDJPY   107.12

USDZAR   16.4545

EURJPY   124.01

EURCHF   1.0752

EURHKD   8.9796

AUDUSD   0.7150

USDCAD   1.3387

USDCHF   0.9287

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