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  • Writer's pictureMike Paterson

It's turnaround time again as Greenback sellers return

Tuesday 3 November 2020

It's US election day and we're seeing some USD supply amid all the uncertainty/unknowns/second-guessing. No one has a crystal ball so for me it remains a case of dealing on fact but that's not going to stop markets from having their roller-coaster ride in the next 24-48 hours. Throw in the rising COVID concerns/ lockdown fallout and it's definitely a heady mix.

I will send something out later re US election outcome variables stategy.

GBPUSD currently heading higher to test 1.2980-00 again amid the general USD selling after finding support into 1.2850 then 1.2900-20 yesterday.EURGBP found support around 0.9000 once more helped those by those large option contract expiries and now capping at 0.9025 as I type but another large amount of 0.9000 expiries today too. I remain a dip buyer overall while respecting the current two-way business still.

No change in my basic view and I stay poised to sell GBP rallies as my preferred side and buy back in the dips as ever. Patience continues to be a virtue and entry level key as always. I still see dip demand though with markets and risk sentiment still in a state of uncertainty overall.Brexit remains the very big elephant in the room and the negative impact of COVID still undermining.

USDJPY still range bound amid the variable risk and USD tones after capping at 105.00 again yesterday but holding 104.45-50 since. EURJPY found a base around 121.80 and now back above 122.30 amid the firmer risk. EURUSD duly held 1.1625-30 support and now back up looking to test 1.1700 again on the softer USD/firmer risk tones. USDCHF has capped above 0.9200 on the EURUSD rally and now testing 0.9160 but finding a little support from EURCHF demand and SNB casting its shadow still.

AUDUSD has also enjoyed a decent rally on the softer USD and RBA gov Lowe makiing it clear there is no intention to introduce negative rates sfter cutting this time to 0.1% as widely expected.   Rally sell remains my preferred strategy amid the fragile risk and ongoing spats with China but respecting US election risk as in all core USD pairs.USDCAD failed into 1.3350 again and has tumbled steadily to now post 1.13150 on the softer USD/firmer risk/oil tones combo.

Markets are ever-fickle so don't forget to contact me if there's areas that you might need some further help with.

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

Interbank rates:  08.40 GMT

GBPUSD   1.2968

EURUSD   1.1682

EURGBP   0.9005

GBPEUR   1.1103

GBPAUD   1.8280

GBPCAD   1.7090

GBPJPY   135.70

USDJPY   104.60

EURJPY   122.19

EURCHF   1.0711

AUDUSD   0.7095

USDCAD   1.3175

USDCHF   0.9167

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