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  • Writer's pictureMike Paterson

Markets still second-guessing as we wait on the ECB

Thursday 9 September 2021

Central Banks have been the theme again in the last 24 hours with a few US Fed heads talking taper by year-end again, BOC leaving rates on hold but not committing to much else moving forward re tapering and BOE's Bailey seemingly suggesting there is more of a split on the MPC than thought on ending current levels of QE. Risk sentiment has been variable but still fragile overall and turning lower again as I type.

Today it's the turn of the ECB to demonstrate that the CBs continue to be stuck between a very large rock and an even harder place as I've been saying now for some time. Expect the usual cautious/both-sides-of-the-coin rhetoric but as always traders must be prepared for anything outside of the box.

As we continue to range remember that patience and discipline in trading are key as ever, and not being greedy.

GBPUSD: Another decent retreat yesterday amid the firmer USD and soggier risk-tones but 1.3725 holding the falls so far but equally 1.3780-85 providing resistance. I remain a rally seller while keeping an eye on EURGBP and GBPJPY as always. EURGBP: Supported now at 0.8570 after yet another failure above 0.8600 as EURUSD chewed its way lower to 1.1815 and remaining on the back foot as we wait on the ECB. GBPJPY: Support at 151.50 still holding the latest retreat but testing there again as I type after failing into 152.00 as risk sentiment softens. Ranging still overall as are core pairs.

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 1.1800 has held so far and pips banked in the extended retreat after capping at 1.1850. Latest ECB policy decision/rhetoric lurking today at 11.45 and 12.30 GMT. A few option contracts in play too. USDJPY: 110.30 has capped the latest rally before falling back to 110.00 amid the risk-off JPY demand. EURJPY: 130.20-30 support now history and currently testing 130.00 after failing in the rally this time at 130.50 amid the risk-off selling. USDCHF: Holding 0.9180 this time as EURUSD retreats and with the SNB ever vigiliant and EURCHF underpinned but failing now into 0.9230. EURCHF: 1.0870 now providing immediate support with SNB shadow ever present after failing at 1.0900 again amid the risk-off supply.

AUDUSD: A steady retreat into 0.7345-50 after rallies failed at 0.7380 this time amid the softer risk/commodity tones. USDCAD: A strong rally to 1.2760 post-BOC amid the firmer USD/softer oil tones before dropping just as fast but heading higher again with renewed CADJPPY risk-off supply giving it a further push higher

Let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates: 07.23 BST

GBPUSD 1.3768

EURUSD 1.1822

EURGBP 0.8585

GBPEUR 1.1646

GBPCAD 1.7502

GBPZAR 19.5197

GBPHKD 10.7268

GBPJPY 151.60

USDJPY 110.10

EURJPY 130.16

EURCHF 1.0870

EURHKD 9.2107

AUDUSD 0.7363

USDCAD 1.2707

USDCHF 0.9195

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