FOMC in focus
Wednesday 3 November 2021
Variable risk and USD tones again this morning as markets gear up for this evening's decision/rhetoric from the US Fed FOMC at 18.00 GMT. A lot of bets placed on some form of taper announcement today even though markets and the Fed are not looking for any rate hikes until next year. Expect some cautious/dovish tones in the mix too though along with the usual hot air on inflation being transitory.
You know my thoughts by now about not over-analyzing FX moves. Let the algos do the heavy work and then decide what presents value or not. It's important to identify on-going ranges and trade the momentum if broken but not getting greedy if they stay intact. Forex is not rocket science but it is ever-fickle so you have to stay in control of you/your trades as much as you can.
GBPUSD: A good test of 1.3600 on the latest retreat but holding so far as EURGBP finds those sellers into 0.8520 and GBPJPY finds support around 155.00. Pips banked per my tweet. Rinse n repeat with one eye on the Fed. I remain a rally seller overall as we continue to range while keeping an eye on EURGBP and GBPJPY as always.
EURGBP: 0.8480-85 still providing a line of support amid the general GBP supply but sellers poised at 0.8520-25 still. GBPJPY: Support at 155.00 again for the moment as core pairs both find some dip demand but still poised at 155.30-50.
I remain a GBP rally seller across the pairs overall as my preferred trading side albeit against the grain currently so being patient as ever. These markets are ever-fickle so good/tight position management essential.
EURUSD: Tightly bound still while the pair remains in the middle of cross-flow action, variable USD and dovish ECB overall, not to mention that option interest yesterday at 1.1585. USDJPY: Yesterday's rally duly capped at 114.00 and re-sells from those 113.50-60 buy-backs duly placed at 113.92 per my tweet. Equally there's still good reason to go long in the dips too while we continue to range but I know my preference. EURJPY: Support line at 131.75-80 now but with rally sellers ever poised, currently around 132.20-25. USDCHF: 0.9100 support holding again so far with the SNB ever vigilant after failure to rally above 0.9150 and sellers remain poised as EURCHF struggles to recover too far amid softer risk and general CHF demand. EURCHF: 1.0550 still holding the retreat after failure into 1.0600 again amid notable CHF demand still but with the SNB ever vigilant. Sellers in the rallies poised again.
AUDUSD: Now holding the old 0.7420 in its latest retreat after breaking down throug 0.7460 where a few sellers are now poised. USDCAD: Still underpinned, now at 1.2380-00, amid some CADJPY supply as oil caps again but rally sellers poised still to contain range.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.55 GMT