Lively makets but good two-way business
Tuesday 28 July 2020
It's been a busy 24 hours for FX pairs, equities, commodities and bonds as markets continue to revel in the cheap money plays but with questions being asked now of just how much the Fed will provide by way of fresh delivery into the food trough tomorrow. COVID resurgence concerns also getting a little notable again along with the on-going Chinese trade retailiation measures.
Gold has been up through $1980 but now fallen sharply along with other commodities in the past few hours and that's brought some risk-off/ firmer USD plays as European trading gets underway. As I've been saying for a while it's all still very fickle out there so we'll continue to trade with caution and not get greedy.The trend may be your friend but there's nothing called a certainty in FX.
GBPUSD posted fresh highs of 1.2905 yesterday having found the expected dip demand I've been warning about but since fallen back to 1.2837 but still expecting decent dip demand.EURGBP has been up to test 0.9150 and some longs unloaded before retreating to look at 0.9100 as I type but still underpinned by the looming month-end demand. GBPJPY found support at 135.20 but equally failing at 136.00 and now 135.85 a few times but finding support since at 135.50-60.
I stay poised to sell GBP rallies overall as my preferred side and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. I still expect to continue seeing some dip demand but cross-flows, risk sentiment and Brexit will continue to see a mixed bag as we've been witnessing.
USDJPY has been down further to 105.13 but rallying to 105.60 as I type amid some firmer USD tones this morning. EURJPY found support at 123.30 this time round but has failed into 124.00 again and fallen to test 123.50 bids amid some softer risk-off Euro plays. EURUSD marched up to 1.1780 yesterday amid the general Euro demand, firmer risk and softer Greenback again but now back down looking at 1.1700 amid the softer risk plays. USDCHF has held 0.9180 on a couple of occasions as EURUSD rallied and with EURCHF still underpinned despite retreating from 1.0828 on some general EUR supply and the SNB ever vigilant in the dip but sellers poised into 0.9230, previously a decent support line and now pivotal therefore.
AUDUSD found a decent base at 0.7120 and has been up to look at 0.7180 this time but retreating to 0.7113 on the softer risk tones as I type with AUDJPY selling notable again. USDCAD failed above 1.3400 this time (we had those decent size expiries there too yesterday as I warned) and retreated to test 1.3330 amid the softer USD/firmer oil price combo but now looking at 1.3390 again on the risk-off CADJPY supply/lower oil/firmer USD triple whammy.
Markets are ever-fickle so don't forget to contact me if there's areas of these markets that you might need some further help with.
I wish you good trading and let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.42 BST