Jury out still as markets wait on ECB
Thursday 10 September 2020
The Pound has paused for breath from its recent retreat amid better risk sentiment generally and a case of being oversold while the Euro holds centre stage as we wait on the ECB.
Will they do anything to back recent concerns voiced on the strength of the Euro? Market seems to be shrugging it off atm if with the Euro still finding good dip demand albeit with rally sellers poised still. I'll email some more thoughts/scenarios later ahead of the 11.45 GMT announcement and 12.30 GMT presser where Lagarde may reveal more.
UK PM Johnson unveiled his Internal Market Bill which created a small GBP wobble but ultimately contained little that hadn't been leaked and we saw a decent rally from the lows but sellers poised still as the EU threatens legal action even if it hasn't walked away from talks as yet.
Market risk sentiment still fragile but a little more steady helped by reports of AstraZeneca resuminmg its vaccine trials next week. All delicately poised still, as are FX pairs.
GBPUSD continued its retreat to test those 1.2885 bids in its post-IMB wobble as per my tweets before better risk and more profit taking saw highs of 1.3035 posted. Rinse and repeat again for the moment. Rallies should still be limited for the moment in the overall scenario but we need to keep an eye on EURGBP as the ECB declares (or doesn't) its intentions later as I tweeted yesterday. EURGBP remains underpinned between 0.9070-80 after capping at 0.9130 yesterday ahead ECB today. GBPJPY found a base 136.80 on the better risk/GBP rally but failing at 138.30 so far and now testing 137.80 support again this morning.
I stay poised to sell GBP rallies overall 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 expect to continue seeing dip demand though should/when we retreat again.
USDJPY has held 105.80-85 (where we also have large option expiries today) and rallying on the better risk sentiment to post 106.30 before retreating again as we continue to range.EURJPY based at 124.60 but since finding sellers at that 125.60 area with core pairs finding rally sellers on the variable risk. EURUSD found more support into 1.1750 and rallied strongly ro 1.1837 and now waiting on today's ECB outcome. USDCHF found a cap this time at 0.9185 as EURUSD rallied but with EURCHF retreating and now breaching 0.9100 as I type.
AUDUSD has made the most of some better risk sentiment/AUDJPY buying to test 0.7300 again. Rinse n repeat still. USDCAD has had another roller coaster ride and failed at 1.3250 to slide back down to 1.3130 amid the better risk/oil plays and some CADJPY demand.
Markets are ever-fickle so don't forget to contact me if there's areas of trading these markets 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: 08.15 BST
GBPUSD 1.3007
EURUSD 1.1824
EURGBP 0.9090
GBPEUR 1.1000
GBPAUD 1.7894
GBPCAD 1.7115
GBPJPY 137.94
GBPZAR 21.6465
GBPHKD 10.0843
USDJPY 106.07
USDZAR 16.6260
EURJPY 125.38
EURCHF 1.0757
EURHKD 9.1676
AUDUSD 0.7270
USDCAD 1.3159
USDCHF 0.9100
