Markets making their minds up again
Tuesday 28 April 2020
No outstanding headlines or new COID-19 developments to steer the algos and so we head into Day 2 of the new week as clueless as we were yesterday but there's still opportunities to be had in these tight ranges for intra-day traders. The only move of note has been another retreat in oil given the ongoing lack of antcipated/actual demand but equity markets are still taking some comfort from expectations that lockdown scenarios around the globe will be lessening soon. I still say the optimism is misguided given the bigger picture down the months/years ahead. Either way the better risk sentimenty is leading to some renewed USD supply as European trading gets underway.
GBPUSD is now up through 1.2450-60 after holding 1.2400 yesterday and again this morning to post new recent highs of 1.2475. EURGBP was duly supported by those EUR775m expiries yesterday but failed to hold above 0.8735 and now below 0.8700 which is adding to the GBPUSD demand. The usual month-end demand should provide some support if we continue to fall.GBPJPY is again holding in a 132.50-133.60 range but rallying toward the top again amid the better risk plays and USDJPY holding 107.00.
I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always.
USDJPY holding 107.00-05 yet again yesterday and this morning but failing to get back over 107.35. Large option expiries today at 107.50 should further cap rallies.EURJPY has held 115.80 on its latest retreat but capping at 116.30 amid some general EUR supply this morning and those USDJPY sellers.
EURUSD duly held the decent 1.0850-60 line again but remains underpinned into 1.0800 amid the softer USD. USDCHF is finding dip buyers around 0.9750 with EURCHF rallying further to test 1.0600 as I type with the SNB still supporting.
AUDUSD has based at 0.6430 and now rallied once more to post 0.6489 on the USD supply/risk-on combo. Note that tomorrow (29th) we have large option expiries at 0.6435 and 0.6450 and I would suggest it's no coincidence that we've seen this latest demand/consolidation in advance of those rolling off.USDCAD capped around 1.4080 and since been down to look around 1.4015-20 again as I type after the oil-retreat rallies have failed into 1.4080 again on the renewed USD supply. Good two-way business still expected.
Have a good day everyone and let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.18 BST