Jury still out in the US election aftermath

Thursday 8 November 2018

As i said yesterday markets are still making their mind up but we're seeing a little risk-on sentiment prevail as equity markets rally and FX traders continue to second-guess.Some focus today on this evening's latest interest rate decision from the US Federal Reserve delayed from yesterday due to the US mid-term elections but no great sparks expected with any rate hike being touted for December.

GBPUSD continues to range and after holding 1.3175-80 yesterday we've been back down to test 1.3100 this morning before rallying back but failing at 1.3150. Some support lent by the risk-on GBPJPY demand but equally sellers remain poised.Sell interest still around 1.3150 then there's more at 1.3175-80 again, 1.3200,1.3230 and 1.3250.Immediate demand now around 1.3100 then larger at 1.3080 then 1.3050, 1.3030 and 1.3000. I remain GBP bearish overall and happy to jump on rallies then buy back in the dips but still not looking for too much of a retracement at the moment.

EURGBP has fallen further to test 0.8700 support (GBPEUR up to 1.1496) and still there as I type. More buyers into 0.8675-80 still then 0.8750 with sellers now poised around 0.8720 0.8750, 0.8780-85 and 0.8800

EURUSD yesterday held 1.1500 after a severe test, as I warned, for much of the European morning session but the large option contract interest helped provide the decent sell interest I highlighted and duly prevailed. Some immediate bids/support still at 1.1400 then 1.1380 and 1.1360. Sellers into 1.1450 again then 1.1480 and 1.1500. Large option interest rolling off tomorrow at 1.1400 and 1.1425 with even larger at 1.1500 should help contain the range.

USDJPY remains underpinned around 113.00 after yet another test but similarly has yet to breach 113.80 on its subsequent rally with Yen selling across the board on the equity-led risk-on sentiment.Immediate sell interest still around 113.80 with larger interest at 114.00 then 114.30 and 114.50.Bids/demand now around 113.50 then 113.30 and 113.00 still. I remain a rally seller buying back in the dips.

USDCHF has also found support from the Swiss Franc selling associated when safe-haven plays dissipate and we've seen a decent rally back to 1.0032 after holding 0.9950-60 yesterday. EURCHF remains underpinned but ranging tightly as general Euro supply prevails.Bids/support still at 1.1430 and 1.1400 with sellers poised at 1.1480-00 still. USDCHF bids now at 1.000 then 0.9980 and 0.9950-60 still with sellers again poised at 1.0060 then 1.0080-1.0100. Still happy to trade both sides of the price action at the moment but preferring the dip buys.

AUDUSD failed at 0.7300 yesterday but remains supported above 0.7250 with option interest today at 0.7300 and tomorrow at 0.7275 helping to contain the range.Immediate bids/support still at 0.7250 then 0.7230, 0.7200 again with sellers still poised at 0.7300 and 0.7320. Last night the Reserve Bank of NZ left rates on hold as expected despite the previous days strong jobs report. USDCAD has fallen back to test 1.3050 support on firmer oil prices and CAD/JPY demand before rallying to 1.3126 only to fall back again this morning helped by more CAD/JPY buying.Bids now around 1.3080 then 1.3050 still with sellers poised at 1.3120 then 13150-60 still.

Fickle Forex markets ever prevailing so get your orders in to take full advantage of these moves.

Have a good day out there one and all.

Twitter: @MSPFX and @MikePatersonFX

Interbank Rate 08.32 GMT

GBPUSD 1.3142

EURUSD 1.1438

EURGBP 0.8703

GBPEUR 1.1488

USDJPY 113.71

USDCAD 1.3094

USDCHF 1.0015

GBPAUD 1.8028

GBPCAD 1.7206

GBPCHF 1.3160

GBPHKD 10.1936

EURHKD 8.8733