Markets still making their mind up
Monday 20 April 2020
A new week underway but no real clues as to where it's all heading and that's understandable given all the unknowns right now. Certain correlations that have been in play such a risk/safe-haven plays are not so clearly in evidence but markets/algos stil seem focussed on any optimistioc COVID-19 news , equities and oil.
So we're ranging on FX pairs as I warned last week and that means good two-way pips to be had if you don't get greedy.
GBPUSD still holding 1.2520-30 but seems to have a line developing now at 1.2440-50 albeit with a new interim top around 1.2485 so take your pick dependent on your bias. For me it's a case of re-sells duly made upstairs again and profit taken on this latest retreat while staying core short. EURGBP duly held 0.8680-85 again and now up to 0.8721 with those large (2.65bln, mostly Puts) 0.8700 expiries in play today too as I warned last week. Also helping to cap GBPUSD.GBPJPY still finding support around 133.80 but now capped at 134.80 as the jury remains out on the next decent move/direction.
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. Equal argument still for buying dips though atm too as I expect to see some decent two-way business for the moment still.
USDJPY duly found support around 107.30 but since capping around 108.00 again. EURJPY fell again to look at 116.50-60 but now capping into 117.30 on the uncertain outlook still. EURUSD held 1.0800 on Friday but still failing to hold above 1.0880 on the rallies.USDCHF fell back from 0.9720 as EURUSD rallied but finding a few dip buyers again with EURCHF holding the next line at 1.0500 with the SNB still lurking.
AUDUSD has held 0.6320 but equally can't get back above 0.6380-85 atm but looks underpinned as oil rallies off its lows and there appears to be an energy/commdity support again. USDCAD has failed at 1.4120 and fallen back to test 1.4000 before rallying as oil retreated to test 1.4100 but sellers prevailing up there and since back down to look at 1.4050 as oil rallies a little.
Let's continue to be careful out there in all things as ever. Staying safe must be our main priority still.
Interbank rates: 08.10 BST