Forex pairs ranging amid further Yen selling
Wednesday 31 March 2021
We've continued to see some month-end JPY supply that I've been warning about here and on Twitter amid general USD demand as 10-year bond yields remain underpinned. Also news that that Hitachi is acquiring US Global Logic for $9.6bln helping but USDJPY capping into reported barrier options at 111.00 with larger noted at 112.00
So we've also seen good dip demand as expected on JPY pairs and I hope the steer has helped but rally sellers still poised. Final month-end flow signals point to moderate USD sales (apart from USDJPY) still and that will help explain the dip demand on core pairs atm.
Lots of variable/fickle flows expected still with some good-size option interest in play too so don't over-analyze. Just pick your preferred entry/exit levels and don't be greedy. Keep an eye into today's 4pm London fix too for last minute month-end activity.
GBPUSD: Enjoyed another good retreat to test 1.3700 but decent demand down there helped by GBPJPY demand has seen a bounce back to post 1.3780 as I type. EURGBP: Still ranging in these lower levels with 0.8500-60 still our lines in the sand. Large option expiries today that should help support.GBPJPY: A good line at 151.20 then 151.50 now as we rally again to test 152.30 amid the JPY supply and helping to underpin GBPUSD but rally sellers poised still.
I remain a GBP rally seller across the pairs but still not getting greedy on the retreats. Good two-way pips to be had for the moment.
EURUSD: Remains under pressure but 1.1700-05 holding so far and pips duly banked in the retreat. Options rolling off today and might be helping currtent rally along with EUR dip demand on the crosses. USDJPY: JPY supply and USD demand double whammy meant a further push to test reported barrier at 111.00 helped in the dip by large expiries at 110.00 and 110.20 today that I highlighted. EURJPY: Finds itself underpinned and rising amid JPY supply still and EUR now fiding some dip demand across the board.USDCHF: Finding a support line now at 0.9400 amid the general USD demand but also EURCHF bids at 1.1030-35 with the SNB ever watchful of course and ready to help.
AUDUSD: Still capped at 0.7660 but underpinned by the JPY supply with AUDJPY demand supporting as well as 0.7580 bids. Sizeable options in play again today.USDCAD: Tightly bound again with a base still at 1.2580 but 1.2650 cap amid the variable USD/Oil tones.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.45 BST