It's still looking fragile out there as equities slump again
Tuesday 20 November 2018
It's been another soggy 24 hours generally for the US Dollar but with tech stocks slumping and triggering falls in others we've also seen a move into risk-off sentiment and safe-haven plays.
GBPUSD has continued to range trade with the no-confidence vote on PM May yet to materialize but the DUP last night abstained on a vote for the government's Budget measures to provide a timely reminder on her fragile position still. The equity risk-off wobble has also seen the usual GBPJPY and GBPCHF selling and that's helped cap rallies at 1.2882 a couple of times albeit with support around 1.2800 after a quick dip to 1.2796.Immediate offers at 1.2860 then still around 1.2880-85, 1.2900, 1.2920 and 1.2950 then larger around 1.2980-00.Bids/demand building again at 1.2820, 1.2800 and 1.2780 with more buyers/support at 1.2750, 1.2720 then larger at 1.2700 still.
I remain GBP bearish overall and happy to jump on rallies then buy back in the dips while remaining core short, a strategy that continues to work well. Today's immediate focus (Brexit news-bombs notwithstanding ofc) is the appearance of BOE's Carney & Co in front of the Treasury Select Committee at 10.00 GMT to explain the November Inflation Report. We can expect a good deal of Brexit in the mix too but, as always, the risk will depend on the quality of the questioning and how far Carney & Co can duck out the way.
EURGBP rallied further to post 0.8932 (GBPEUR lows of 1.1195) but has drifted back again to 0.8890 before settling in a 0.8900-25 range this morning. Buyers poised between 0.8890-00 still then 0.8880, 0.8850, 0.8830 and 0.8800 still with sellers now at 0.8925-30 and 0.8950 still.More lined up between 0.8980-00.
EURUSD remains underpinned helped now by the softer USD$ sentiment and we've now been up to 1.1472 before falling back on the EURJPY and EURCHF supply.Immediate bids/support now at 1.1420, then 1.1400, 1.1380,1.1350 1.1320 and 1.1300 still, with sellers at 1.1450, then 1.1475-80 and larger at 1.1500 still.
USDJPY has had yet another wobble lower to 112.31 on the softer USD tones and the risk-off Yen demand with equities tumbling from the post-Fed Friday comment rallies.Immediate sell interest now at 112.50, 112.65 112.80 and 113.00 with bids at 112.20, then larger at 112.00, 111.80 and 111.50-60. I remain a rally seller buying back in the dips. The net short GBPJPY position at good levels continues to work well.
USDCHF has also fallen further to test 0.9900 with the Swiss Franc finding demand again on the risk-off tones and EURCHF falling again with the SNB seemingly fine watching for the moment and not getting involved but they can never be ruled out the of mix. EURCHF bids/support now around 1.1330, 1.1300 and 1.1280 with sellers poised around 1.1380, 1.1400 then 1.1420 and 1.1450 still. USDCHF bids now at 0.9900, then 0.9880 and 0.9860 with sellers around 0.9950 then 0.9980 and 1.0000. I'm happy to trade both sides of the price action at the moment.
AUDUSD has failed above 0.7320 and fallen back through 0.7300 to post lows of 0.7268 with US-China trade concerns back in the mix as well as some AUDJPY selling. Decent bids/support still at 0.7250 then 0.7230 and 0.7200 still with sellers lurking around 0.7300 then 0.7320 and 0.7350. USDCAD continues to trade tightly amid the mix of softer USD/softer oil prices. Bids now at 1.3150 again then 1.3120-30 and 1.3100 with sellers poised around 1.3180, 1.3200 and 1.3230 still.
Fickle Forex markets ever prevailing so get your orders in to take full advantage of these moves.
Have a good week out there one and all.
Interbank Rate 08.25 GMT GBPUSD 1.2857 EURUSD 1.1448 EURGBP 0.8903 GBPEUR 1.1231 USDJPY 112.40 USDCAD 1.3164 USDCHF 0.9920 GBPAUD 1.7633 GBPCAD 1.6926 GBPCHF 1.2755 GBPHKD 9.9680 EURHKD 8.8755