Markets second-guessing still
Friday 7 January 2021
Softer risk and USD appetite generally but with the now usual dip demand in both the Greenback and equities to provide some good two-way business still. Gold has traded tightly and oil prices too amid the second-guessing as markets wait on the US NFP data at 13.30 GMT.
Forex pairs are still contained in tight ranges and there's some decent option interest in play today across a few pairs to keep in mind during any NFP fallout.
As always, don't over-analyze or second-guess but keep your focus on price action in core and cross-pairs and identify recent ranges to see whether we hold or break and what levels present value for money. Patience will invariably be a virtue but don't confuse patience with being stubborn. A new year maybe but same rules of trading always.
GBPUSD: The expected failure into 1.3550-60 yesterday but equally support coming in now at 1.3515.20 and some pips banked in the retreat per ongoing strategy. GBPUSD rally sellers, including me, ever poised while keeping one eye at least on the cross flows and risk sentiment. EURGBP: Ranging still amid the variable risk tones with that strong support around 0.8330 (GBPEUR resistance 1.2000) but equally sellers into 0.8380 (1.1935 support). Should continue to see good two-way buiness. GBPJPY: 156.50 support area held well again yesterday but equally 157.00-20 providing some sell interest as risk remains fragile.
I remain a GBP rally seller across the pairs overall as my preferred trading side but being patient as ever. These markets are ever-fickle so good/tight position management essential.
EURUSD: 1.1280-85 still providing support after a failure around 1.1330 this time with some large option interest in play again today. USDJPY: Capped at 116.00 where we have large option interest today but equally still holding 115.60 with markets treading water into NFPs as well. EURJPY: 130.60 support still holding but sellers prevailing at 131.20 this time amid the variable risk. USDCHF: 0.9200 resistance now becomes support having broken with the SNB shadow ever present and EURCHF back above 1.0400. EURCHF: Softer risk EUR demand and SNB ever vigilant helping to lift above 1.0400 to test 1.0425.
AUDUSD: Per my mention yesterday it's no coincidence we're still trading around 0.7160 where we have large option interest rolling off today with more at 0.7200. Yesterday's cap around 0.7180 was a good sell opportunity but equally support still coming in at 0.7140.
USDCAD: Support coming in now at 1.2700-20 again after the failure above 1.2800 on the softer USD/firmer oil double whammy. Option interest lurking today here too.
My beloved Southend United travel west to Weymouth for tomorrow's game (COVID permitting) and our first chance to look at a couple of recent recruits. Every point crucial from here on in. Come on you mighty Shrimpers.!!
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.53 GMT