Greenback falls on dovish Fed and the Pound remains under pressure
Thursday 29 November 2018
Yesterday I warned about US Fed Chair Powell stepping up to the mic and his dovish comments, further to those recently from Vice-Chair Clarida,sent the US Dollar lower. Brexit's in the mix still too ofc and some scary/scaremongering No Deal scenarios from Carney & Co have helped bring yet another reality check for the Pound.
GBPUSD initially fell on the BOE outlook but soon rallied on the dovish Fed comments and from 1.2745 we've tested 1.2850 before sellers, including me, once again jumped in. The end-of month EURGBP demand from the Bundesbank buying the UK's EU contributions that I've been highlighting again also helping to cap. Immediate offers now around 1.2800,1.2820 then 1.2850 still. Bids/demand now between 1.2750-60 then the decent line at 1.2720-30 still and larger at 1.2700, 1.2680 and 1.2650 still.I remain GBP bearish overall and happy to jump on rallies then buy back in the dips while remaining core short, a strategy that continues to work well.
EURGBP fell through the 0.8830 support but has since rallied on that month-end BUBA demand and general GBP selling to post 0.8912 (GBPEUR down to 1.1219). Sellers still at 0.8920 and 0.8950 with buyers at 0.8875-80 and 0.8850.
EURUSD has taken good advantage of the USD selling, EURGBP and EURCHF buying and broken back up through 1.1300 to post highs of 1.1398 but some EURJPY selling helping to add supply along with decent offers at 1.1400 and 1.1420. More behind that at 1.1450.Immediate demand/support now into between 1.1350-60 then 1.1320 and 1.1300 w
USDJPY tested 114.00 but was soon in retreat on Powell's dovish tones and now fallen to post 113.21. Bids building still 113.20 that I mentioned yesterday then 113.00 and 112.80 with sellers now into 113.50 then 113.80 and 114.00. I remain a rally seller for the moment buying back in the dips.
USDCHF remains underpinned above 0.9900 but similarly found itself in Fed-led retreat to post 0.9917 before finding the usual dip demand with EURCHF also rising to post 1.1320 from 1.,1285. Sellers remain poised on both though even if the SNB may well look to "smooth" the declines.Bids/support now at 1.1280 and 1.1250 with USDCHF demand now at 0.9930 then 0.9900 again. Sellers poised at 1.1330 and 1.1350 with USDCHF supply now at 0.9980 and 1.0000. I'm happy to trade both sides of the price action at the moment in these tight ranges.
AUDUSD has enjoyed the Fed/trade talk ride and burst up through 0.7280-00 to post highs of 0.7334. Bids now at 0.7300 then larger interest at 0.7280 and 0.7250 with sellers at 0.7350 and larger lurking at 0.7380-00. USDCAD remains underpinned on lower oil prices and shrugging off the general USD supply. Buyers now lining up at 1.3275-80 then 1.3250 and 1.3230 with sellers poised at 1.3320 and 1.3350-60.
Fickle Forex markets ever prevailing so get your orders in to take full advantage of these moves.
Have a good day out there one and all.
Interbank Rate 09.45 GBPUSD 1.2779 EURUSD 1.1367 EURGBP 0.8897 GBPEUR 1.1237 USDJPY 113.29 USDCAD 1.3287 USDCHF 0.9941 GBPAUD 1.7446 GBPCAD 1.6971 GBPCHF 1.2698 GBPHKD 9.9076 EURHKD 8.8169