FX pairs ranging still amid ongoing uncertainty
Thursday 3 October 2019
UK PM Johnson has revealed his new Brexit proposals that would see N.Ireland stay in the European single market for goods but leave the customs union - resulting in new customs checks. Questions obviously now over whether any of the new deal is " operational" ie can it be implemented even if the EU/Ireland agree which looks unlikely and the jury remains well and truly out with Johnson insisting he will not seek an extension and the UK will leave on 31 October regardless. I'm not so sure on that one.
Meanwhile UK parliament will be suspended again briefly so that the government's new/broader agenda, a.k.a. The Queen's Speech, can take place on 14 October. No guarantees that the measures will be approved and that will bring Johnson's tenure as PM into question again. Keep up at the back still!
Elsewhere we've seen some more risk-off sentiment with equities and oil retreating again after more soggy US data. Ongoing uncertainty too over US-China trade wars and the global scene still looks very unsettled. Swiss franc supply notable though so it's certainly not just a case of simple safe-haven plays.Plenty of data today in the mix too including services sector PMI from EU. UK and US and US non-ISM manufacturing and factory orders.
GBPUSD continues to trade up and down but all in recent ranges and providing good two-way opportunity with rallies failing above 1.2320 again and we're now on session lows at 1.2267.EURGBP has remained underpinned with Euro rallies outstripping those of the Pound and we've seen another test of 0.8920-30 (GBPEUR down to 1.1207). GBPJPY has seen a further retreat amid the GBP turmoil and softer risk impact with a test of 131.50.
I will continue to rally-sell GBP as my preferred strategy overall too amid the ongoing uncertainty/indecision including Brexit/political fallout but happy to buy back in the dips as always.Rinse and repeat.Still no reason to change my view any time soon as the current madness plays out but caution as ever is appropriate. Just ignore the noise, identify the trading ranges, and let the algos do the work. This morning's UK Services PMI will have impact if wide of expectations given the sector's 80+% contribution to GDP but will still play second fiddle to any Brexit developments/news bombs.
EURUSD has breached 1.0950 but failed again around 1.0965 with option expiry interest today at 1.0970 helping to cap. USDJPY duly fell through 107.50 and 107.30 on the soggy US data/softer risk combo and we've been down to test 107.00 again. USDCHF has shrugged off the softer USD/risk sentiment combo to test 1.0030 with EURCHF again finding buyers to post fresh recent highs of 1.0975 amid the general EUR demand.
AUDUSD remains on the back foot and failed on another rally at 0.6720 but finding some Gold price support.USDCAD finally broke back up through 1.3300 helped by softer oil prices/CADJPY selling but failing at the next decent 1.3340-50 line.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
Huge congrats to Dina Asher-Smith on her fantastic Gold in the 200m. Now all eyes on KJ-T in the heptathlon.
Have a good day out there one and all.
Interbank Rate 07.45 BST