Jury still out on risk sentiment and US Dollar
Thursday 7 November 2019
Market wise it's all extremely tight still as the US-China trade talks continue to produce varying headlines/undertones with the latest this morning from MOFCOM suggesting that the US and China agree to roll back on tariffs in different phases, proportional and based on Phase 1 agreement. This has prompted some risk-on plays but as ever we'll wait on any US response. Meanwhile the gloves are off in the UK General Election as campaigning officially gets underway but nothing that has yet to really impact on the Pound.
GBPUSD has fallen further to test 1.2830 bids/support helped by some more USD demand and risk- off GBPJPY supply yesterday before bouncing this morning on that risk-on China trade news as GBPJPY also bounces to post 140.33. EURGBP still ranging too with support around 0.8600 again but failing to climb above 0.8620 ( GBPEUR 1.1600-1.1630).GBPJPY also continues to see good two-way trading and tightly bound.
I will continue to rally-sell GBP as my preferred strategy overall too amid the ongoing Brexit/Election uncertainty but always happy to buy back in the dips still. A decent case for GBP longs again in the dips if this tight range continues so take your pick. In essence the general uncertainty and can kicking continues and for me that's still Pound negative. I make no apologies for trawling out the same thoughts because for me nothing has really changed.
EURUSD has held 1.1050 on its own journey lower helped by some ongoing USD demand but also rallying this morning on some risk-on EURJPY demand. USDJPY fell to post 108.65 on yesterday's softer risk tones but has bounced back above 109.00 but capping again.USDCHF has posted fresh recent highs of 0.9939 as EURUSD fell and still remains underpinned helped by the current risk-on tones and given the SNB being ever vigilant.
AUDUSD remains tightly bound amid the US-China uncertainty but holding 0.6860 and bouncing back above 0.6900 helped by the latest round of AUDJPY demand. USDCAD has found itself tightly bound again between 1.3150-1.3200 with uncertain oil price and USD outlook.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.Don't forget too that I offer 1-2-1 mentoring if there's areas of trading these tight ranges that you might need some further help with. I develop your powers of trading discipline and psychology all learned in my 38 years in FX, including 20 as a leading market maker.
One last housekeeping note today is to let you know I shall be taking a week's holiday (my first this year!) from 12-19 November and will not be turning any screens or phones on let alone send updates. I will politely ask you to contact your rate providers directly. Thank-you.
Have a good day out there one and all.
Interbank rates: 09.15 GMT