Greenback being grabbed
Friday 12 February 2021
Another day, another week almost over and another change in tone for the US Dollar after I warned here yesterday that it was "pausing for the moment as markets continue to make their mind up". Risk sentiment remains positive overall as equities and commodities continue to stay underpinned albeit slightly softer this morning but also going nowhere in a hurry.
China's week-long Lunar Holiday continues adding to the current market malaise still. UK GDP data out earlier was soggy to say to the least. Awful QQ and YY readings but December offered some hope obviously helped by Xmas spending. January/February data won't be pretty though as we remain in lockdown. BOE Chief Economist has come out with a happy-clappy forecast of consumer spending once COVID lockdown becomes less of an issue. Not exactly rocket science but it will depend on how low our starting point is. All things relative these days.
As if you need reminding I'll repeat again that the Forex jury is ever-fickle amid all the noise so keep playing what's in front of you and don't over analyze or assume anything.
GBPUSD found sellers above into 1.3850 then 1.3820 helped by some USD demand and that EURGBP options-led suport I warned about here and on Twitter to now test 1.3775-80 this morning. EURGBP duly found support at 0.8765 and then tightly bound since with those expiries rolling off between 0.8765-80 but a bias to the topside. A break out above 0.8785 afterwards was shortlived but demand now building around 0.8770. GBPJPY found a decent cap into 145.00 this time but equally finding support at 144.50 and retesting 145.00 as USDJPY remains underpinned above 104.80.
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 yesterday broke up through 104.80 and that's provided a good base since before now posting 105.10 as I type amid some general USD demand and sizeable options interest today.EURJPY has made a good hold of 127.00 now amid the core pair dip demand.EURUSD capped over 1.2140 again amid the firmer USD tones but finding some dip demand at 1.2100 helped by cross plays and options contract interest.USDCHF found a good base at 0.8900 this time as EURUSD capped with the SNB ever watchful.
AUDUSD has duly found support at 0.7720 this time after failing above 0.7770 with large option contract interest helping to support.USDCAD duly found good suppport this time at 1.2660 and has rallied well to now test 1.2750 this morning on the firmer USD tones and oil coming off its tops.
England's cricketers continue battle with India tomorrow with a spring in their step but with respect for the oppo too ofc. Southend travel to Cambridge. Dare I hope for a sporting double success again.......??!!
Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a peaceful weekend.
Interbank rates: 08.23 GMT