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  • Mike Paterson

Jury out as we wait on US Federal Reserve

Wednesday 19 June 2019

Ongoing uncertainty ahead of the US FOMC making their latest interest rate announcement tonight means we have seen tight ranges prevailing still.Lots of conjecture in recent weeks that they will cut this year, possibly today but my gut view is that I don't think they act this time but we can't rule it out.Data has been mixed, albeit not over-bullish, so a cut today might suggest they are panicking a little or being led by Trump.

I don't hold a lot of store by second-guessing CBs anyway given that the outcome is beyond our control but it's safe to say they will remain on the cautious side and make clear they are ready to act blah blah, as indeed did ECB's Draghi yesterday which sent the Euro tumbling.

GBPUSD held onto the strong support that I highlighted at 1.2500 and has been back up to 1.2570 helped by some profit-taking on recent moves lower (myself included) and by GBPJPY and GBPCHF demand on news that US and China are talking more positively on trade.The on-going political risk as the Tory Party leadership contest continues to play out with last night's debate offering nothing new but confirming Rory Stewart as the only candidate left ruling out No-Deal Brexit.BOE in the mix tomorrow too.

EURGBP fell back on the Draghi comments but is holding 0.8900-05 with decent bids there prevailing so far. GBPJPY has found buyers prevailing as risk-off sentiment waned on the US-China trade talk comments but sellers remain poised with USDJPY also failing to breach 108.70 still.

I remain GBP bearish overall and continue to rally-sell as my preferred strategy amid all the uncertainty/indecision including Brexit/political fallout as I've been warning about for month, but happy to buy back in the dips as always.

EURUSD's large option expiry interest at 1.1200 held the initial Draghi-led falls but afterwards we saw a test of 1.1180-85 again while USDJPY failed into 108.00 yet again but similarly failed at 108.70 again too so we're firmly entrenched in that range for the moment as we wait on the Fed.USDCHF also failed around 1.0020 after the risk-on rally but still tightly bound overall as EURUSD and EURCHF both find the expected dip demand.

AUDUSD took out the offers/sellers at 0.6850-60 on the US-China trade news having held 0.6830 but has failed around the 0.6885 sell interest now. USDCAD fell back as oil prices firmed again combined with some good CADJPY demand on the risk-on sentiment but continuing to range as markets fear the FOMC.

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

I wish you good trading and I hope my updates/tweets are helping. If not then do let me know why not.Feel free to contact me about discounted 1-2-1 mentoring rates if you need some clarity on current moves or finding it difficult to make money from my recommendations/strategy.

I shall be at my desk for the Fed at 18.00 GMT so watch out for my tweets and I will try to send an update here too.

Have a good day out there one and all.

Interbank Rate 07.59 BST

GBPUSD   1.2544

EURUSD   1.1197

EURGBP   0.8925

GBPEUR   1.1203

GBPAUD   1.8243

GBPCAD   1.6777

USDJPY   108.27

USDZAR   14.4634

EURJPY   121.24

EURCHF   1.1187

EURHKD   8.6810

GBPJPY   135.85

GBPZAR   18.1614

GBPHKD   9.7254

AUDUSD   0.6878

USDCAD   1.3370

USDCHF   0.9990

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