Greenback lower as markets wait on FOMC
Wednesday 16 December 2020
The Brexit-led rollercoaster ride for the Pound continues but we've also seen a distinct lack of appetite for the US Dollar as markets anticipate some dovish tones/action from the last US Federal Reserve meeting of 2020 this evening at 19.00 GMT and press conference from Chairman Jerome Powell at 19.30 GMT.
I will try and find time in a busy day ahead, on and off the pitch, to offer some more thoughts on the FOMC but suffice to say we always need to try and evaluate how much has been factored in already. COVID is still casting its sad shadow but risk sentiment continues to hold firm with equities and oil higher on hopes of greater injection of liquidity. Strange ol' world still.
GBPUSD yesterday held the pivotal 1.3280 area and then saw a solid rise through the day on positive Brexit vibes and softer USD and now breaching 1.3500 this morning. EURGBP at 0.9150 and some pips duly banked but has made a steady retreat to look at 0.9000 (GBPEUR 1.1100) this morning as GBPUSD rallied and the generally Brexit positive impetus throughout the day plus a break of 0.9060-80 which has held recent retreats. Currently back up to 0.9040 ( GBPUSD down to 1.1060 ) as the rollercoaster ride continues.GBPJPY duly found good support at 138.30 and has pushed on to test 139.80 amid the firmer GBP/risk sentiment.
I stay poised to sell GBP rallies as my preferred side and buy back in the dips as ever.Patience continues to be a virtue and rally-selling in GBPUSD can still bring reward but entry level key as always. Definitely still expecting some dip demand so equally a case for going long in the dips too amid all the volatility as I've warned for a while now. Brexit still the large elephant in the room.
USDJPY duly failed into 104.20 again and fell back through support areas 103.80, 103.65 and 103.50 amid the softer USD tones but firmer risk sentiment still providing some support on JPY selling. EURJPY remains tightly bound currently between 125.60-126.60 amid variable sentiment and cross flows on both core pairs. EURUSD has now cleared 1.2180 and taken out a barrier option at 1.2200 amid the general USD supply after finding demand below 1.2130 again which we know was a decent line in the sand and had those large EUR option Puts in play too.USDCHF remains on the back foot but now clinging on to 0.8825-30 as EURUSD rallies but with the SNB still ever watchful.
AUDUSD remains underpinned into 0.7500 but still struggling to break up through 0.7580 as China continues to cast a shadow while USDCAD has failed above 1.2760 and tested 1.2680-00 amid the softer USD/firmer oil price combo and now capping at 1.2740.
Markets are ever-fickle so don't forget to contact me if there's areas that you might need some further help with. Lots of traders taking advantage of my current offers on these sessions so don't miss out.
Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good week one and all.
Interbank rates: 08.35 GMT