Greenback under pressure amid US Fed negative rate signals
Friday 8 May 2020
US Fed Funds futures for January 2021 posted above 100.00 yesterday in late European trading and that triggered lots of market/algo chatter on US interest rates turning negative and down came the Greenback to give up a lot of its daily gains in rapid fashion.
The jury remains out but with markets in the UK and France both closed today for VE Day remembrance liquidity will be a little thinner with focus on US NFPs as their latest economic indicator following on from yesterday's understandably awful jobless claims data.
GBPUSD yesterday continued its retreat and eventually posted 1.2267 as per my Tweets but the Fed Funds-related US supply then kicked in to post 1.2350, then 1.2380 before reteating to test 1.2350 defence I tweeted about before rallying back above 1.2400 only to fail again.Keep up at the back! EURGBP capped at 0.8791 (GBPEUR support 1.1375) and retreated to now look at 0.8735 as the GBPUSD rally outstripped that of EURUSD given its initial greater fall. GBPJPY found good support around 130.80 on its latest retreat yesterday but capping at 132.00 again.
I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always.
USDJPY has held the 106.20 line again after failing around 106.60 amid those large expiries that I mentioned yesterday and then the USD Fed Funds retreat. EURJPY yesterday held 114.80 on its latest retreat before failing at 115.50 on the subsequent rallies only to then find dip support as core pairs both do similar. EURUSD had a quick look below 1.0780 but the USD supply pushed it back up to 1.0825-30 then test the next pivot at 1.0850 before running out of steam again as the EZ concerns continue. USDCHF has held 0.9700 again on its latest retreat as EURUSD rallied with EURCHF still holding 1.0520 amid the SNB still supporting.
AUDUSD has made the most of the USD retreat and a little better risk sentiment to power its way up to look at 0.6550 and looks underpinned for the moment again as I warned yesterday despite my rally-sell preference overall.
USDCAD has this time failed around 1.4100 and retreating this morning to look at 1.3930.
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Let's continue to be careful out there in all things. Staying safe must be our main priority still. Make sure you get some rest over the weekend.
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