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  • Writer's pictureMike Paterson

Markets still digesting FOMC fall-out

Thursday 30 July 2020

The US Fed FOMC yesterday left rates on hold and Powell made it quite clear that there will be no rate hikes anytime soon adding that continued monetary and fiscal policy is needed.

Markets are still taking it all in and we've seen a mixed reaction so far but overall the Greenback remains on the back foot with month-end flows also still in play.

GBPUSD took out the the 1.3000 barrier resistance but failed to make much progress higher and fell earlier today to test 1.2940-50 helped by some EURGBP demand only to recover since as EURGBP retreats from 0.9080 amid some general EUR supply still. EURGBP yesterday held 0.9030 and rallied strongly helped by the month-end demand but has failed above 0.9080 on a few occasions and now testing 0.9050 bids again with more demand at 0.9030.GBPJPY found support at 135.80 this time around but failing above 136.50 for the moment as core pairs both find rally sellers.

At the risk of repetition (!) 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 duly found support at 104.75-80 but since failed above 105.20.EURJPY found support at 123.20 but has failed above 123.80 amid some rally-sell interest on core pairs.EURUSD failed above 1.1800 after a post-FOMC spike and now retreated to test 1.1750 amid some general Euro supply but underpinned still amid the general Greenback selling. USDCHF capped above the pivotal 0.9180 area I higlighted yesterday but since holding 0.9120 on the retreat so still range bound as is EURUSD with EURCHF also in retreat but still underpinned and the SNB ever vigilant in the dip.

AUDUSD capped into 0.7200 again and now in retreat to test 0.7130. USDCAD found support at 1.3330 and has now rallied above 1.3400 amid some softer oil/firmer USD tones combo this morning.

Markets are ever-fickle so don't forget to contact me if there's areas of trading 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:  08.45 BST

GBPUSD   1.2980

EURUSD   1.1759

EURGBP   0.9055

GBPEUR   1.1043

GBPAUD   1.8164

GBPCAD   1.7390

GBPJPY   136.42

GBPZAR   21.7986

GBPHKD   10.0634

USDJPY   105.03

USDZAR   16.7871

EURJPY   123.50

EURCHF   1.0747

EURHKD   9.1129

AUDUSD   0.7147

USDCAD   1.3394

USDCHF   0.9142

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