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  • Writer's pictureMike Paterson

It's risk-off time again and Yen buyers prevail

Friday 2 August 2019

I've been warning for ages about global fragility amid trade talk/CB/global economic slowdown uncertainty to name just three key factors and finally we've seen a decent move lower in USDJPY as the US-China trade war escalates and throws more fuel onto the fire. Trump has thrown more tariffs on Chinese goods who in turn have threatened to retaliate. Equity markets have fallen again and Gold remains underpinned as safe-haven plays are the order of the day once more.

USDJPY has tumbled to post 106.83 as traders/algos run for cover amid illiquid Summer conditions and fill up on Yen positions across the board. Excessive move maybe but one that was waiting to happen.USDCHF has also fallen to test 0.9850 support with EURCHF also down to 1.0944 this morning helped by the CHF risk-off demand but the SNB will be ever vigilant.

GBPUSD tried to rally but got sucked lower by the GBPJPY selling and has been down below 1.2100 again before running into fresh buyers but sellers remain poised.EURGBP dip buyers still prevailing but equally rally sellers also poised. GBPJPY has tumbled to take out a raft of bids along the way to post lows 129.34 and that keeps the pressure on the Pound overall.

I remain GBP bearish and will continue to rally-sell as my preferred strategy amid all the uncertainty/indecision including Brexit/political fallout. No changes from the BOE yesterday re monetary policy but the Quarterly Inflation Report included GDP downgrades amid the generally cautious tones as expected. Yesterday's parliamentary bye-election saw the Lib Dems steal the seat from the Tories and reduced Boris' majority to 1 even counting the DUP support. Not a great platform from which to govern and a General Election can not be too far away once Brexit removes the Brexit party threat.

EURUSD has found a little support but also capped by the EURJPY and EURCHF supply while AUDUSD has been kicked lower again by the US-China trade spat and AUDJPY selling to post fresh lows of 0.6791 and remains on the back foot as I've been warning. USDCAD remains underpinned helped by CADJPY selling.

Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

We've had some good moves lately and I hope my updates/tweets are helping you make sense of it all.

England's cricketers took early Ashes control but then let the Aussies back in as Steve Smith marked his return to Test cricket with a hard-fought ton to leave the match delicately poised.

Delicately poised could also describe the season ahead for the mighty Shrimpers of Southend United and I'll be travelling to tomorrow's opening game full of the usual hope and expectation. Old habits die hard !

Have a good day/weekend out there one and all.

Interbank Rate 08.28 BST

GBPUSD   1.2121

EURUSD   1.1090

EURGBP   0.9148

GBPEUR   1.0929

GBPAUD   1.7830

GBPCAD   1.6033

GBPJPY   129.56

GBPZAR   17.8211

GBPHKD   9.3974

USDJPY   106.93

USDZAR   14.6987

EURJPY   118.56

EURCHF   1.0949

EURHKD   8.5986

AUDUSD   0.6795

USDCAD   1.3229

USDCHF   0.9873

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