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  • Writer's pictureMike Paterson

Greenback under pressure amid better risk tones

Wednesday 15 July 2020

The happy-clappy/ultra-cheap money is good brigade are back, once again choosing to ignore COVID and other global concerns, and we've seen equity and commodity markets rally again providing risk-on tones to FX pairs with a softer US Dollar notable.

UK retail sales and PPI data out earlier sprung little surprise and BOE's Tenreyro comments that further easing action may be required have been largely ignored in the early-European clamour to sell USD.

GBPUSD yesterday found support into 1.2480 as per my tweet yesterday and now back up through 1.2600 helped by the softer USD and EURGBP retreating too. Let's see how long-lived this latest rally lasts.

EURGBP continued its march higher to break up through 0.9100 and some more pips duly banked from longs as per my tweet but finally capped at 0.9113 and has been back down to test support at 0.9050 helping the GBPUSD rally.GBPJPY found a base at 134.00 but is failing above 135.00 so far after the risk-on rally.

I stay poised to sell GBP rallies overall as my preferred side and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. I still expect to continue seeing some dip demand but cross-flows, risk sentiment and Brexit will continue to see a mixed bag as we've been witnessing.

USDJPY failed into 107.50 and has been down to 106.94 so far amid the softer Greenback but finding some support from risk-on Yen selling. EURJPY found support at 121.60, then 121.80 and 122.00 amid the Euro demand/risk-on ride higher but has capped into 122.50 for the moment.EURUSD continued to enjoy the Euro-positive ride higher given further impetus by those large option expiries and now softer USD to post 1.1445 highs not seen since March. USDCHF failed at 0.9410 this time and has fallen to test 0.9370 as EURUSD rallies again but EURCHF demand once again tempering further losses with the SNB ever vigilant in the dips.

AUDUSD has finally popped up through 0.7000 on the softer USD/better risk combo but failed into the next tranche of offers at 0.7020 and now back down through 0.7000 again. USDCAD has fallen from 1.3640 to 1.3580 the softer USD/firmer oil price combo but finding a little support as I type. Large option expiries between 1.3600-30 should help keep the range contained barring major news bombs.

Markets are ever-fickle but good two-way pips to be had so don't forget to get in touch if there's areas of trading these markets or how to make best use of the order boards and expiries, that you might need some further help with.

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

Interbank rates:  08.48 BST

GBPUSD   1.2607

EURUSD   1.1434

EURGBP   0.9070

GBPEUR   1.1023

GBPAUD   1.7990

GBPCAD   1.7121

GBPJPY   134.88

GBPZAR   20.9382

GBPHKD   9.7742

USDJPY   106.98

USDZAR   16.6191

EURJPY   122.35

EURCHF   1.0718

EURHKD   8.8671

AUDUSD   0.7008

USDCAD   1.3582

USDCHF   0.9374

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