Markets making their mind up still
Friday 24 September 2021
Firmer risk tones for most of yesterday saw JPY and CHF supply again underpinning cross and core pairs but we've seen a little retracement since as the jury remains out still. Equities and commodities seeing good two-way action overall as are forex pairs.
The BOE did little to dampen expectations of a rate hike early next year with markets now pricing in February and after an initial dip post-announcement we saw some steady GBP demand helped by the firmer risk tones before running out of steam.
So the feast/famine/variable-risk roller coaster ride continues and amid all this uncertainty I will repeat that patience and discipline in trading are key, as ever, and not being greedy.
GBPUSD: Finally broke 1.3700 post-BOE after an intitial dip into 1.3670 and rallied steadily to test 1.3750 and I hope you had your orders placed ready to take advantage. I remain a rally seller while keeping an eye on EURGBP and GBPJPY as always. EURGBP: Held good support at 0.8530 in the firmer GBP retreat but the rally since to 0.8562 has helped to cap GBPUSD. GBPJPY: Good support at 150.00 then 151.00 amid the firmer GBP/risk double-whammy and has been testing 15175-80 offers before stalling with sellers still poised when risk sentiment fades.
I remain a GBP rally seller across the pairs but being patient as ever. These are risk sentiment markets and ever fickle so good/tight position management essential.
EURUSD: 1.1755 still providing a cap but holding 1.1720 now as the pair finds itself in the middle of cross-flow action and variable risk plays not to mention the ongoing option interest. USDJPY: 110.00 finally broke and we've been up to look at 110.60 amid the firmer risk tones but fading as I type. EURJPY: Now up through 129.00 after clearing out those good offers but failing at 129.80 as I type amid variable risk and EURUSD offers. USDCHF: Still finding a base at 0.9220 as EURUSD caps again at 1.1755-60 and with the SNB ever vigiliant as EURCHF held 1.0800 and then 1.0840 since. EURCHF: Holding 1.0800 and now 1.0830-40 seems a decent line in the sand with SNB shadow ever present.
AUDUSD: Enjoyed a good rally through 0.7280-00 amid the firmer risk tones but has failed at 0.7320 and retreating to 0.7275 as I type .USDCAD: Yesterday saw further falls in the subsequent retreat on the fimer risk/oil tones and CADJPY buying but held 1.2640 amid the option interest down there but failing at 1.2700 so far as I type. Plenty more option interest in play again today.
Ryder Cup golf starts today. One of the great sporting contests. Bring it on !!!!
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.24 BST