FOMC in focus

Wednesday 16 September 2020

ood two-way business again in the past 24 hours with a softer USD bias amid variable risk ahead of today's US Fed FOMC decision/presser.

General scenario markets expect is rates unchanged but a slightly more accommodative stance by way of forward guidance that the Fed funds rate will remain at 0% until the one-year-forward inflation forecast is at least 2.25%. Some also expect the Fed to shift Treasury purchases to 5-year and longer. I will update with some more thoughts/latest order boards prior to the event at 18.00 GMT with Chairman Powell's virtual presser at 18.30 GMT

UK inflation data out earlier came in higher than expected but still at its lowest level for many a while.Once again, as with all figures atm, the real picture is still uncertain and continues to be a moveable feast as government support makes an impact.

GBPUSD found support around 1.2850 after failing above 1.2925 but since unable to get back up through 1.2920. Rinse n repeat for the moment. EURGBP capped around 0.9250 again and has broken down through 0.9200 in Asia to post 0.9172 lows but now testing 0.9200-10 again as I type and helping to cap GBPUSD. GBPJPY is ranging 135.50-136.50 still amid variable risk, lower USDJPY and GBP tones.

I stay poised to sell GBP rallies as my preferred side and buy back in the dips as ever.  Patience continues to be a virtue and entry level key as always. I still expect to continue seeing dip demand though.

USDJPY range now currently lower again at 105.20-60 after another retreat amid the softer risk/USD combo.EURJPY has also retreated further on the general EUR supply/JPY demand combo but finding support into 124.50 for the moment.EURUSD had a good look at 1.1850 from 1.1880 into  option expiry time yesterday as the sell side made its move. Forewarned is forearmed always on options interest. A further retreat in Asia found support at 1.1830-35 before boucing back up through 1.1865 as I type.USDCHF failed into 0.9100 again having held at those 0.9050 bids and in retreat again now amid the latest EURUSD rally/softer USD.

AUDUSD currently on the rise again after finding support below 0.7300 amid the general USD supply and now back up above 0.7330.USDCAD failed around 1.3200 again after basing at 1.3130 as we continue to range.

FX pairs 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.

I wish you good trading and 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   1.2888

EURUSD   1.1853

EURGBP   0.9197

GBPEUR   1.0872

GBPAUD   1.7609

GBPCAD   1.6972

GBPJPY   136.53

GBPZAR   21.1282

GBPHKD   9.9928

USDJPY   105.32

USDZAR   16.3815

EURJPY   124.83

EURCHF   1.0752

EURHKD   9.1914

AUDUSD   0.7314

USDCAD   1.3179

USDCHF   0.9072