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  • Writer's pictureMike Paterson

Greenback still making its mind up

Thursday 21 October 2021

USD sentiment remains mixed amid all the Central Bank hike conjecture as does the recent trend of weaker JPY with some strength now noted in Asia and early Europe as USDJPY looks at 114.00 again. Some CHF demand too again as USDCHFplays with 0.9200 but with the SNB ever vigilant.

Equities and oil remain underpinned overall along with yields but all off their highs again as European trading gets underway. Commodity currencies showing notable strength in early Asia but some reversals/reality check/profit-taking in the past few hours too in these ever-fickle times.

For FX markets focus on the price action and decide what presents value or doesn't, and if in doubt, keep out. Be aware of those rising support lines and/or falling resistance levels. Forex is not rocket science but it is ever-fickle so you have to stay in control of you/your trades as much as you can.

GBPUSD: Yesterday's retreat duly stopped around the 1.3745-50 area per my tweet at the time. Strong rally followed to post highs of 1.3834 a couple of times but some softer risk tones (GBPJPY supply) since sees 1.3800 action again. I remain a rally seller overall but still respecting the ongoing dip demand while keeping an eye on EURGBP and GBPJPY as always. EURGBP: Rally duly failed at 0.8460 again per my tweet but still holding 0.8420 in the retreat so far. Delicately poised still. GBPJPY: Good support now at the previous 157.00-20 area after the retreat from Asian highs of 158.22 as some JPY demand/profit-taking returns. Still prefer to sell rallies but respecting dip demand on this and core pairs.

I remain a GBP rally seller across the pairs overall as my preferred trading side albeit against the grain currently so being patient as ever. These markets are ever-fickle so good/tight position management essential.

EURUSD: Another cap above 1.1660 and retreating amid the softer risk tones and general EUR supply on the perception of no ECB hike or taper but still in the middle of cross-flow action. USDJPY: Finding good support around 114.00 again after a cap this time at 114.40 helped by the softer risk tones. EURJPY: Support line at 132.90-00 now history amid the general JPY demand/softer Euro double whammy but 132.50 support remains a bigger challenge. USDCHF: A failure at 0.9250 as CHF demand returns and now back down through 0.9200 and EURCHF testing 1.0700 again on the softer risk tones but with SNB ever vigilant. I prefer to buy the dips still overall but not greedy in the rallies. EURCHF: 1.0700 support now being tested with SNB shadow ever present after failing at 1

AUDUSD: Strong commodity currency-led rally to 0.7547 in early Asia along with CAD and NZD but now back testing 0.7480 on the softer risk/AUDJPY supply. Option contract interest today nearby. USDCAD: Another failure at 1.2360 yesterday and a sharp retreat to test 1.2280 once the break of 1.2320 triggered some stops amid the ongoing CADJPY and commodity currency demand but since reversing back to 1.2335 as CADJPY sellers prevail on the softer risk/oil tones.

A new management team for the mighty Shrimpers of Southend United now in place and we must hope this time we begin a steady path of progress.

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

Interbank rates: 08.35 BST

GBPUSD 1.3803

EURUSD 1.1645

EURGBP 0.8434

GBPEUR 1.1857

GBPJPY 157.50

GBPCAD 1.7022

GBPZAR 20.0416

GBPHKD 10.7502

USDJPY 114.06

EURJPY 132.81

EURCHF 1.0712

EURHKD 9.0665

AUDUSD 0.7493

USDCAD 1.2328

USDCHF 0.9250

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