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  • Writer's pictureMike Paterson

Jury still out as another week closes

Friday 22 October 2021

I know it's all a bit repertitive at the moment but that just sums up what's happening out there and the answer to that is not a lot of note with range trading very much the pattern once more in recent sessions. PMI flash data out this morning appears better on the headlines but the detail presents concerns still although the key Services data for UK has lifted the Pound off its session lows.

USD sentiment remains mixed amid all the inflation focus/Central Bank hike conjecture as does the recent trend of weaker JPY with some strength now returning but those pairs and hence the cvore pairs still finding dip demand so goig nowhere in a hurry. Equities and oil remain underpinned overall along with yields but all off their highs again as European trading gets underway. Commodity currencies still perky as Gold rallies to test 1800 again.

For FX markets focus on the price action and decide what presents value or doesn't, and if in doubt, keep out. Be aware of those rising support lines and/or falling resistance levels. Forex is not rocket science but it is ever-fickle so you have to stay in control of you/your trades as much as you can.

GBPUSD: Yesterday's rally duly stopped around the 1.3820-25 area and re-sells duly placed on the momentum fade as some softer risk tones (GBPJPY supply) since sees a test of 1.3780 action again and some pips banked. Option interest at 1.3700 today and Monday potentially in play but need a break below the strong 1.3740-50 support.I remain a rally seller overall but still respecting the ongoing dip demand while keeping an eye on EURGBP and GBPJPY as always. EURGBP: Still holding 0.8415-20 and now rallying to look at the equally key 0.8460-65 area as we continue to range.GBPJPY: The good support at 157.00-20 area now being threatened as some JPY demand/profit-taking returns. Still prefer to sell rallies while respecting dip demand on this and core pairs.

I remain a GBP rally seller across the pairs overall as my preferred trading side albeit against the grain currently so being patient as ever. These markets are ever-fickle so good/tight position management essential.

EURUSD: Still holding 1.1620 (large option interest today 1.1600-10 helping) and now up through 1.1640 but sellers poised 1.1650-60 still. The pair remains in the middle of cross-flow action. USDJPY: Finding good support around 113.80 after a cap this time at 114.20 helped by some JPY buying and softer USD tones. EURJPY: Support line at 132.20-30 now after the break of 132.50 but rally sellers poised again as the picture remains murky. USDCHF: A failure at 0.9200 now sees a break below 0.9180 as CHF demand returns and EURCHF below 1.0670 on the latest round of CHF demand but with SNB ever vigilant.EURCHF: 1.0680-00 support now broken but with SNB shadow ever present as CHF demand returning.

AUDUSD: 0.7450 providing good support after the retreat from 0.7547 onand now testing 0.7500-05 again as commodities remain firm and risk turns a little more positive as I finish this report.USDCAD: A break of 1.2360 yesterday but failure at 1.2385 sees 1.2336 posted as I type amid some softer USD tones and CADJPY demand returning.

Have a great week-end everyone and here's to a win for the mighty Shrimpers to mark the start of the new regime.

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

Interbank rates: 08.36 BST

GBPUSD 1.3795

EURUSD 1.1644

EURGBP 0.8441

GBPEUR 1.1842

GBPJPY 157.10

GBPCAD 1.7022

GBPZAR 20.1312

GBPHKD 10.7502

USDJPY 113.92

EURJPY 132.65

EURCHF 1.0682

EURHKD 9.0773

AUDUSD 0.7497

USDCAD 1.2337

USDCHF 0.9232

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