Forex pairs ranging still
Wednesday 3 February 2021
Lots of noise again but the end result is still very much the same for Forex pairs. Some weakness still in the Euro but unable to break recent ranges with a positive response on news that the former ECB head Draghi has been asked to meet the Italian president with a view to becoming PM of a new government.
Elsewhere in the overy-hyped la la land of GME and Silver we've seen a further retreat while Bitcoin makes gains after its own wobble earlier in the week. Risk sentiment overall remains positive with equities and oil firmer.
USD demand notable still overall but once again the Forex jury remains out amid all the noise so keep playing what's in front of you and don't over analyze.
GBPUSD broke down through 1.3650 but found a base this time at 1.3612 before bouncing back to test 1.3680 only to fail once more and now in retreat again.EURGBP tested 0.8800 again but rallied only to fail above 0.8835 (GBPEUR support 1.1320) and now in retreat to 0.8800 ( 1.1365 )again as the Euro remains on the back foot overall. GBPJPY foud a decent cap yhis time at 143.80 as core pairs found rally sellers and sentiment wobbleds but equally good support below 143.20 and ranging since with USDJPY still going nowhere.
I still have a naturally bearish stance on GBP overall and remain poised to sell into rallies but respecting dip demand still with price action ever fickle. Equally a case still for going long in the dips therefore as we continue to range. Patience and not getting greedy remain key.
USDJPY held 104.85 but failed into 105.20 amid the tight range with Japanese year-end JPY repatriation by corporates in the mix as per my mention here yesterday. EURJPY failed at 126.80 as USDJPY and EURUSD found rally sellers but holding 126.20 so far. EURUSD broke down through the strong 1.2050-60 area then 1.2025-30 but held 1.2000 before rallying and failing at 1.2050 which now becomes pivotal. Cross-pair flows still in evidence too. USDCHF has held above 0.8970 this time amid the soggy EURUSD action and with the SNB ever watchful but failing into the larger line at 0.9000 so far this morning.
AUDUSD broke down through 0.7600 amid some general USD demand and was pushed down into 0.7660, low enough for those 0.7600 expiries to be out of the game having done a decent containing job earlier. Since been back up to test 0.7625 but sellers poised amid some RBA dovish tones, albeit repeated but also some AUDNZD selling.USDCAD found a good cap again at 1.2860 as oil price rallied abut holding 1.2760 this morning amid some firmer USD tones.
As we look at trading opportunities to begin the year it's even more important not to over analyze but trade the price action with discipline and patience.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.32 GMT