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  • Mike Paterson

Mixed US Dollar tones amid fragile risk plays

Friday 19 November 2021

Variable USD tones still but gently firmer overall and we've seen some underpinning of yields and equities as oil climbs off its 6-week lows but some wobbles again as I type amid impending lockdowns in Europe.

ECB's Lagarde has been out talking down inflation again this morning but markets suitably unfazed given we've heard it all before. More US Fed speakers today in the mix.

It's still a case of "what next" as markets and traders continue to second-guess the central banks everywhere with this renewed fragile risk sentiment lurking amid rising COVID cases in Europe and political unease around Ukraine, Taiwan and elsewhere. Gold is still above 1850 but failing to extend any gains beyond 1870 again.

GBPUSD: Support at 1.3450 now breaking as I type and triggering stops into 1.3430 after failing above 1.3500 and some pips banked again in the latest retreat after duly placing rally re-sells. The pair does remain underpinned by firmer GBPJPY and softer EURGBP overall. I remain a rally seller while keeping track of EURGBP and GBPJPY as always. EURGBP: Still dangerous to bottom-pick at the moment amid the general EUR supply but yesterday we did duly see support at 0.8400 from those good size option contracts yesterday as I warned here and tweeted. Rally sellers still poised though between 0.8430-50 (GBPEUR support 1.1835-50). GBPJPY: Still got sellers 154.50 prevailing but equally finding support between 153.80-00 amid the variable risk and USD tones.

I remain a GBP rally seller across the pairs overall as my preferred trading side albeit still against the grain currently so being patient as ever. These markets are ever-fickle so good/tight position management essential.

EURUSD: Support at 1.1300 still in place but equally sellers prevailing at 1.1350-75 and now testing lows again amid some general USD demand. I still expect any bounce to be less than impressive amid rising COVID cases, dovish ECB,and cross-flow action. USDJPY: Holding 114.00 still helped yesterday by that options interest and now testing the pivotal 114.50 area amid the firmer USD tones this morning.EURJPY: 129.50 now providing some support but with rally sellers still poised as I've been warning, this time at 129.80-00.USDCHF: Support still coming in around 0.9260 with the SNB ever vigilant and protecting 1.0500 on EURCHF. EURCHF: 1.0500 still holding the retreats, just, and a bit of a line in the sand for the SNB but those sellers in the rallies still prevailing amid the EUR weakness. Beware a break of 1.0490-00 that will trigger stops.

AUDUSD: 0.7250 support still in place helped yesterday by that decent option interest but rally sellers into 0.7300 again helped by firmer USD tones. Beware stops being triggered if/when 0.7250 breaks. USDCAD: 1.2580 still holding after failing at 1.2640 and retreating amid rising oil prices and hence renewed CADJPY demand. Firmer USD generally now helping to support in the dips.

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

Have a great week-end.

Interbank rates: 08.28 GMT

GBPUSD 1.3480

EURUSD 1.1320

EURGBP 0.8412

GBPEUR 1.1889

GBPJPY 154.27

GBPZAR 21.0657

GBPCAD 1.6967

GBPHKD 10.4775

USDJPY 114.34

EURJPY 129.66

EURCHF 1.0511

EURHKD 8.8128

AUDUSD 0.7284

USDCAD 1.2597

USDCHF 0.9267

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