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