Markets waiting on US Fed
Wednesday 29 January 2020
The Coronavirus fallout continues with great force and markets remain in watchful/cautious mood with risk sentiment fragile still but it's the US Fed's latest monetary policy decision looming this evening at 19.00 GMT and the BOE at 12.00 GMT tomorrow that also remain very much in focus. I aim to send you a Fed preview later today.
GBPUSD yesterday eventually broke down through the decent bids/support at 1.3000 helped by month-end EURGBP demand but we held at the next tranche around 1.2980 and have since rallied nicely for re-sell opportunities into 1.3030. EURGBP tested 0.8480 (GBPEUR down to 1.1792) on that month-end Bundesbank demand but has since retreated on the general GBP buy-backs.GBPJPY remains on the back foot overall but found some decent demand/support around 141.50 with core pairs both finding dip buyers but sellers remained poised around 142.30-35.
I stay poised to sell GBP rallies overall and buy back in the dips as ever but continue to see some good two-way business as we continue in these tight ranges and with the BOE looming large tomorrow. The UK leaving the EU on Friday also remains one of the great unknowns.
EURUSD is still on the back foot around 1.1000 amid some general USD demand but still tightly bound. USDJPY also remains under pressure on the fragile risk overall but rallied to test sell interest/resistance into 109.30 only to retreat again but holding 109.00 for the moment.EURJPY is still holding 119.80 but rally sellers remain ready too amid the softer risk plays and general sogginess in core pairs atm. USDCHF duly found a bid around 0.9680 as EURCHF tested the 1.0660 area I highlighted and it seems that the SNB defence of that previous line in the sand has begun as I warned yesterday with rallies to 0.9748 and 1.0733.
AUDUSD has rallied on some less dovish data/RBA tones but capped at 0.6778 with large sell interest today between 0.6780-00. USDCAD remains tightly bound after failing above 1.3200 and falling to test 1.3150-60 support/bids helped by firmer oil prices and some better risk providing CADJPY demand.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
A long and disappointing round trip to Doncaster last night for both the team and us 180 fans who could be bothered to go and witness the 3-1 defeat. Disarray off the pitch continues and that means we're blooding youngsters ahead of their time against some seasoned pros like last night's oppo. Basic errors continue on and off the field and concerns only sadly grow.
Have a good day out there one and all.
Interbank rates: 09.10 GMT