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  • Writer's pictureMike Paterson

Greenback grabbed as FOMC points to taper mode

Thursday 17 June 2021

The US Fed FOMC finally provided more hawkish tones and despite some watering down in the press conference by Powell we've seen some strong USD demand to shake Forex markets out of their recent ultra-tight malaise.

Hurrah! As regular readers know I don't care to over-analyze, I just try to keep focussed on price action and post-FOMC that proved its worth, per my tweets and I hope the steers helped you too. Some pips banked too early as I didn't expect such big moves to be honest but no one got poor by taking profit off the table.

I still say the jury is out on USD and risk sentiment so I've got a position/preference as ever, short GBPJPY across the core pairs, that supports that view per my tweets yesterday and this morning. Pick your preferred entry/exit levels and don't be greedy or over-analyze. Patience and discipline are key too of course.

GBPUSD: Those re-sells up to 1.4120, albeit a little premature, provided some decent pips in the retreat and I remain core short. I remain a rally seller but expecting some dip demand in this extended move. EURGBP down to 0.8546 also helping to underpin.EURGBP: Finally falling through 0.8580 and now testing next strong line at 0.8550 as EURUSD tumble outstrips GBPUSD post-FOMC with ECB's Lane highlighting they are in no rush to taper anytime soon.GBPJPY: Capping at 155.00-20 and testing 154.50-60 again as risk sentiment turns a little softer and justifying my short strategy across the core pairs but I'm expecting dip demand on both too.

I remain a GBP rally seller across the pairs but still not getting over greedy with expectation on the retreats.

EURUSD: Capped into 1.2120 before FOMC and now having another tumble down to 1.1935 having cracked the strong 1.1980-00 support in Asia. I prefer to sell rallies still.USDJPY: 110.80 capping the latest rally and some re-sells duly placed per ongoing strategy and tweets but equally still a case for going long in the dips with support now 110.25-50. Options interest in play today too.EURJPY: 132.80 now providing a decent cap after another fail at 133.20 and tumbling to 132.25 amid softer risk/EUR tones.USDCHF: Powering higher post-FOMC with EURCHF also underpinned despite EURUSD tumbling with the SNB ever vigilant but springing no surprises at this morning's announcement.EURCHF: Holding 1.0880 again with SNB shadow ever present and probably pre-empting EUR falls generally.

AUDUSD: Having its own meltdown post-FOMC and lower now but finding support at 0.7600 as I type. USDCAD: Holding 1.2160 again and powering higher to 1.2300 amid the firmer USD tones with aome CADJPY demand now also helping. Large option interest tomorrow in play.

Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good week everyone.

Interbank rates: 08.48 BST

GBPUSD 1.3970

EURUSD 1.1954

EURGBP 0.8554

GBPEUR 1.1689

GBPCAD 1.7189

GBPJPY 154.53

GBPZAR 19.6520

GBPHKD 10.8309

USDJPY 110.60

USDZAR 14.0546

EURJPY 132.20

EURCHF 1.0902

EURHKD 9.2659

AUDUSD 0.7615

USDCAD 1.2300

USDCHF 0.9119

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