It's a fragile world out there still

Thursday 2 December 2021

Another interesting day with risk sentiment on the back foot yesterday again capping core Forex pairs but some good two-way business/retracement since and in equity markets too. Variable/limited risk and USD tones as European trading gets underway. Gold tightly bound too amid the uncertainty.

COVID/Omicron fears and unknowns very much still lurking with markets going to keep second-guessing how it might all impact CB action amid the increased economic uncertainty.I had a productive dabble on the FTSE 100 again yesterday with a short at 7156 that I hope you followed on Twitter.

As always, don't over-analyze but keep your focus on price action in core and cross-pairs and recent ranges to see whether we hold or break and what levels present value for money. If in doubt, stay out.

GBPUSD: Capped around 1.3350 again and a nice retreat to 1.3260 helped by underpinned EURGBP and GBPJPY risk-off supply. GBPUSD rally sellers, including me, ever poised while keeping one eye at least on the EURGBP and GBPJPY cross flows. EURGBP: Another failure above 0.8530 and now looking at the decent base at 0.8500 (GBPEUR resistance 1.1765) as I type. Expect more 2-way business amid the general uncertainty. GBPJPY: 149.60 provided the support line this time around and now testing 150.80 amid the better risk tones and core pair dip demand. Should continue to see good two-way business as risk sentiment continues to be ever-fickle.

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

EURUSD: Support at 1.1300 now after failing to rally above 1.1360 then 1.1340 amid the variable risk and USD tones. USDJPY: Further falls yesterday to test 112.60 but a good risk-on rally since to 113.30. EURJPY: 127.60 support once again yesterday but capping at 128.25 so far amid the variable risk tones. USDCHF: Support at 0.9170 then 0.9190 with the SNB ever vigilant with EURCHF holding 1.0400 still. EURCHF: Still holding 1.0400 with SNB shadow lurking still.Sellers poised 1.0430-50 again.

AUDUSD: 0.7095-00 providiing a base for the moment but equally failing to get back above 0.7120. USDCAD: Now capped at 1.2830 helped by the rise in oil price and hence CADJPY demand again but some support still between 1.2760-80.

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

Interbank rates: 08.33 GMT

GBPUSD 1.3312

EURUSD 1.1322

EURGBP 0.8502

GBPEUR 1.1760

GBPJPY 150.78

GBPCAD 1.7036

GBPCHF 1.2260

GBPZAR 21.0574

GBPHKD 10.3685

USDJPY 113.21

EURJPY 128.17

EURCHF 1.0430

EURHKD 8.8167

AUDUSD 0.7109

USDCAD 1.2798

USDCHF 0.9212