Greenback under pressure again
Wednesday 6 January 2021
Markets wait on the Georgia run-off results but seem to be factoring in a Democrat victory for both Senate seats which is producing some USD supply on extra stimulus hopes after a bit of a fight-back yesterday on better US data. Some notable winners out there such as AUD but we've seen a general USD retreat.
Some good two-way business to be had though still as the jury remains out and some retracement being seen as I type with price action fragile so continue to be patient but not greedy on your entry/exit levels.
Final December UK Services PMI data just out has shown a further deteoriation in the sector as would reasonably be expected.
GBPUSD duly based into 1.3550 again yesterday after a retreat amid the firmer USD and softer risk tones and rallied to 1.3660 on the general USD selling. EURGBP failed into 0.9060 (GBPEUR support at 1.1035) but holding 0.9000 this time around (GBPEUR sellers 1.1110).GBPJPY duly held 139.50 but now led by GBPUSD rally and USDJPY dip demand to test 140.30 again.
I still have a naturally bearish stance on GBP overall and remain poised to sell into rallies but respecting the current vagaries for the moment. No currency is an island.
USDJPY failed into 103.00 this time and retreated to test the bigger support at 102.60 again amid the softer USD/risk combo while EURJPY held 126.00 yet again and now testing 126.80-00.EURUSD held 1.2250 this time around but failing into 1.2350 for the moment amid softer risk tones/ profit taking. USDCHF has broken down through 0.8785 on the softer USD/risk combo but holding 0.8760 for the moment with the SNB ever watchful and helping EURCHF stage a decent rally along with EURUSD.
AUDUSD duly found a base at 0.7680 this time on its latest retreat and the higher trend is gathering pace still amid the softer USD tones to test 0.7800 as I type.USDCAD capped this time at 1.2760 and has fallen to test 1.2650 as I type on the general USD supply again with oil steady.
There's little doubt that we live in strange times with the UK now belatedly back in full national lockdown and rationale was thrown out the window a long time ago generally around the globe so as we look at trading opportunities to begin the year it's even more important not to over analyze but trade the price action with discipline and patience.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.28 GMT