Jury out on the Pound amid fresh Brexit turmoil
Wednesday 2 October 2019
With UK PM Johnson seeming delivering a "take it or leave it" ultimatum" to the EU we've seen the Pound up and down, and all around, in the past 24 hours but still ranging as markets continue to second guess.Johnson is set to lay out his proposal at the Tory party conference where he's due to stand up at 11.00 GMT.
Elsewhere we've seen some risk-off sentiment and USD supply prevail again as equities retreat after some soggy US manufacturing data and reports of North Korea launching another missile. Ongoing uncertainty too over US-China trade wars and the global scene still looks very unsettled.
Amid all the Brexit headlines GBPUSD yesterday fell to test 1.2200 then recovered back through 1.2250 before spiking to post 1.2345 only to retreat once again then rallying again but this time failing at the 1.2320-30 pivotal area and dropping back to test 1.2250. Keep up at the back!. EURGBP has also enjoyed a roller coaster ride in the process. After that support at 0.8830 holding then 0.8850 we've been up to test 0.8920 (GBPEUR down to 1.1210) before retreating.GBPJPY also saw some good two-way business again amid the GBP turmoil and variable risk impact. The early drop meant 132.50 gave way and we saw 131.80 before the spike to 132.80 and subsequent retreat to 132.00.
I will continue to rally-sell GBP as my preferred strategy overall too amid the ongoing uncertainty/indecision including Brexit/political fallout but happy to buy back in the dips as always.Rinse and repeat.Still no reason to change my view any time soon as the current madness plays out but caution as ever is appropriate. Just ignore the noise, identify the trading ranges, and let the algos do the work.
EURUSD has been trading tightly again after an early hold of 1.0880 yesterday but failing to breach 1.0950 after finally breaking up through 1.0930. Bids building now at 1.0900 then 1.0875-80 still with more at 1.0850-60, 1.0830, and 1.0800. Offers at 1.0930 then larger at 1.0950 still, 1.0975-80, and 1.1000. I'm favouring the rally-sell side still as my preferred strategy but don't see recent ranges breaking for the moment.
USDJPY duly failed into 108.50 and rally sellers including me were happy to jump back in then had the double bonus of soggy US data and softer risk. EURJPY failed above 118.00 but since been holding 117.50 on the retreat. USDCHF has been capped by the softer USD/risk sentiment combo but tempered by EURCHF again dip demand.
AUDUSD remains on the back foot after the RBA rate cut but held 0.6680 only to fail on the rally at 0.6720. USDCAD STILL has good two-way business within 1.3200-1.3300 amid the variable oil/USD/risk sentiment.USD supply prevailing mostly and dropping back from 1.3288 to test 1.3200 but tempered now by some CADJPY supply too.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
Have a good day out there one and all.
Interbank Rate 08.36 BST