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  • Writer's pictureMike Paterson

Month-end flows and options very much in the mix

Friday 30 August 2018

It's all very scrappy still as we head into the final day of the month with more volatility anticipated but ranges being contained by large option expiry interest.Yen and Swiss Franc demand also notable as risk sentiment turns soggy again.

After Wednesday's strong GBPUSD rally it's all been a tad boring with good demand around 1.2980 and sellers at 1.3030 keeping a tight rein on price action. GBPJPY supply has helped cap rallies in a turnaround from the drive higher. Immediate support/buying interest still around 1.2980 then more into 1.2950 and 1.2930 which remains a pivotal area.Sellers still building around 1.3030 as I warned yesterday then again at 1.3050,1.3080 and 1.3100.Good two-way business to be had but I prefer to sell the rallies still.

EURGBP has duly found a little support from the month-end demand having held 0.8950 and that demand has helped cap GBP overall too. More demand into 0.8930 which remains a key area as does 0.8900. Sellers now around 0.8980-85 then 0.9000 and larger into 0.9030.Dip demand still expected through month-end but sellers remain poised too with some general Euro supply prevailing. Today Raab and Barnier meet for more Brexit talks so we can expect plenty of soundbites but don't hold your breath for substance.

EURUSD has duly capped into 1.1700 with the large option contract interest rolling off today that I highlighted/warned of yesterday.More option related sell interest at 1.1720 and between 1.1730-50.Buying interest between 1.1650-60 still with sizeable option interest rolling off there today too then more into 1.1625-30 and 1.1600.

USDJPY failed to hold above 111.20 with option interest of its own expiring today on a busy month-end slate and we've been down to 110.77 only to run into option-related demand.Sellers now poised at 111.00, 111.20-30 and 111.50 still. Buyers lining up into 11070 with more between 110.30-50 then 110.00. USDCHF has been on the back foot again after failing above 0.9700 and retreating to test demand/support around 0.9650 with CHF demand prevailing across the board. Dip demand still expected but those CHF buyers remain poised as I've been warning.

AUDUSD has duly fallen further to test 0.7250 support where options also roll off today but range expected to be contained by larger option interest between 0.7290-00 275. More buying interest building at 0.7230 then the 0.7200 barrier option defence. Sell interest still at 0.7320 then between 0.7350-60. USDCAD has rallied strongly with the Canadian $ now suffering over the NAFTA uncertainty and the jury is still out as I warned yesterday. Buyers now around 1.3000 then larger into 1.2980 and 1.2950. Sellers around 1.3030 then 1.3060 and 1.3100

Fickle markets still prevailing, and month-end volatility again expected today, so get your orders in to take full advantage of these moves.

The mighty Shrimpers return to the hallowed Hall tomorrow looking to consolidate recent success. Bring on Charlton!

As for England's cricketers well what can I say? Another dismal batting display but a fine knock from Curran that gives the bowlers something to play with today. They'll have to be on the money though. All set up for a decent Test if so.

Have a great week-end out there one and all.

Interbank Rate 09.10 BST GBPUSD   1.3004 EURUSD   1.1676 EURGBP   0.8979 GBPEUR   1.1136 USDJPY  

 110.77 USDCAD   1.2931 USDCHF   0.9693 GBPAUD   1.7870 GBPCAD   1.6825 GBPCHF   1.2614 GBPZAR   18.9812 GBPHKD   10.0928 EURHKD   9.0625

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