FX pairs ranging in a rollercoaster ride again
Friday 16 July 2021
Yesterday hawkish comments from BOE's Saunders fired up the algos and we saw a GBPUSD test of 1.3900 in a hurry and EURGBP also swiftly lower to 0.8512 while GBPJPY ramped up to test 152.80. Cue the reality check though and a full reversal as the roller coaster ride continues in the ever fickle world of Forex as we now see some risk-on core pair demand return as Europe gets underway.
Overnight some strong inflation data out of NZ has seen the Kiwi rally and although capping at 0.7440 it remains underpinned while the SA Rand continues its volatile path this week amid the domestic unrest. The Canadian $ remains weak amid firmer USD,CADJPY supply and the not so small matter of 3.8bln Puts interest at 1.2500 rolling off today that I've been warning about this week. More of the same old story from the BOJ too in the past few hours but GDP forecasts cut. Fed's Williams speaking at 13.00 GMT.
Patience and discipline in trading are key as ever and not being greedy as we continue to range tightly overall but good to see some greater levels of intra-day volatility return.
GBPUSD: A good cap into 1.3900 yet again post-Saunders and re-sells duly placed with pips banked into 1.3850 and at 1.3820 per my tweets.Still keeping some core shorts. EURGBP breaking back up through 0.8530 and GBPJPY selling also helping to cap GBPUSD again but some dip demand notable again as I type. I remain a rally seller while keeping an eye on EURGBP and GBPJPY as always.EURGBP: Capped at 0.8565 as the Saunders comments drove it down to 0.8512 but rally sellers poised again though and currently in retreat from 0.8555.GBPJPY: A steady retreat to 151.60 from the rally highs of 152.80 but core pair dip demand and some better risk as I type seeing a move back through 152.20.
I remain a GBP rally seller across the pairs but being patient as ever. Risk to the downside though still overall.
EURUSD: Finding buyers below 1.1800 again but rallies remain weak having capped at 1.1850 again and since at 1.1820. Cross flows very much making an impact to help contain the range.USDJPY: Another good hold of 109.75-80 in Asia and pips duly banked. Now capping at 110.20-25 again.EURJPY: 129.80 support line again now after holding 129.60 in the extended retreat but rally sellers poised at 130.20-30 still.USDCHF: A good hold of 0.9160 then 0.9180 as EURCHF rallies strongly from 1.0800 with the SNB ever vigilant. EURCHF: A good hold of 1.0800 which I highlighted yesterday and now forming a decent line at 1.10830 with SNB shadow/help ever present but rally sellers still poised amid the variable risk tones.
AUDUSD: Those very large options at 0.7500 yesterday in the end were nowhere to be seen come expiry time but their work had already been done as I've been highlighting all week. AUDJPY moves having an impact too of course.USDCAD: The very large options today very much helping to support the 1.2500 area along with some general USD demand.Sellers at 1.2600 prevailing for the moment.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.06 BST