Forex jury still out as another week begins
Monday 5 July 2021
The US NFP data came in rather mixed with a decent upbeat in payrolls but softer unemployment rate and wages, all with an unchanged participation rate. Once again the algos reacted on the headline and we saw some USD demand but on closer inspection sellers returned, equities rose and risk sentiment firmed. All amid plenty of option interest I warned about too. I hope you were able to take advantage.
US holiday today so we might expect the usual quiet start to the week but equally we have less liquidity so can never rule out some volatility. Later today the UK will hear what lockdown easing will look like on July 19th. Final PMI data being released as I type. RBA decision tonight and some QE fine tuning expected but no rate change for a long while yet.
USD/forex jury remains out still. Patience and discipline in trading are key as ever and not being greedy as we continue to range tightly.
GBPUSD: A strong hold of 1.3735 per the orderboard post-NFPs and pips banked again. I didn't get involved after that as I was out per my update and tweet. Some re-sells into 1.3820 and 1.3850 so far since, part hedged against USDJPY re-sells again. A decent support line at 1.3820 now. I remain a rally seller but still expecting dip demand. Keeping an eye on EURGBP and GBPJPY as always.EURGBP: Still finding sellers around 0.8600 and testing 0.8565 now as we continue to range.GBPJPY: Variable risk sentiment providing Yen supply post-NFPs as equities rallies but that's now run out of puff again into 153.80 but bids at 153.50 helping to underpin atm
I remain a GBP rally seller across the pairs but being patient as ever. Risk to the downside though still overall.
EURUSD: A dip into 1.1800 post-NFPs and a decent rally since helped by softer USD tones, firmer risk sentiment and those large options Puts I warned about but 1.1880 proving a step too far. Decent support line now though at 1.1850 with some decent option interest in play today. USDJPY: A good cap above 111.50 post-NFPs and now lower testing 110.80 support amid the general USD supply.EURJPY: 132.20 forming a good cap now as I wartned here on Friday but bids at 131.50 lurking now in the retreat.USDCHF: Underpinned at 0.9200 after Friday's 0.9260 cap post data but sellers prevailing at 0.9230 as EURUSD finds 1.1850 support with the SNB ever vigilant as EURCHF sinks back a little.EURCHF: Holding 1.0960 now with SNB shadow/help ever present but sellers poised around 1.0980 still too.
AUDUSD: A good hold of 0.7440-50 post-NFps then 0.7480 as the rally got underway and now 0.7500 providing a decent lin with a bit more interest today around 0.7500 too. USDCAD: Strong support area at 1.2300-20 now after Friday's 1.2440 cap helped by the general USD supply and oil prices firming. CADJPY in play as always.
Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good week everyone.
Come on England !!!!!!!!!!!!!!!!!!!!
Interbank rates: 08.43 BST