More of the same as another week gets underway
Monday 25 October 2021
Jury still out amid variable risk and USD sentiment amid all the inflation focus/Central Bank hike conjecture and this week brings further clues/hot air as we get the latest decisions from the BOC (Wednesday) then BOJ and ECB on Thursday. Equities and oil remain underpinned overall along with yields but all off their highs again as European trading gets underway as per recent patten. Commodity currencies still perky as Gold breaks 1800.
For FX markets focus on the price action and decide what presents value or doesn't, and if in doubt, keep out. Be aware of those rising support lines and/or falling resistance levels. Forex is not rocket science but it is ever-fickle so you have to stay in control of you/your trades as much as you can.
GBPUSD: Friday saw the pair cap into that 1.3820-25 area again and re-sells duly placed on the momentum fade as some softer risk tones (GBPJPY supply) returned to eventually see a test of 1.3735-40 late in the day and some pips banked in the retreat per my tweet. A good bounce since to post 1.3792 but dropping back as I yype.I remain a rally seller overall but still respecting the ongoing dip demand while keeping an eye on EURGBP and GBPJPY as always. EURGBP: 0.8435-40 now providng some support and helping to cap GBPUSD but equally failing to get back over 0.8480 once 0.8460 had broken and now back to look at 0.8450. GBPJPY: Good support emerging at 156.00 after that 157.00-20 area broke amid Friday's softer risk tones/JPY demand but capping around 156.80 since.
I remain a GBP rally seller across the pairs overall as my preferred trading side albeit against the grain currently so being patient as ever. These markets are ever-fickle so good/tight position management essential.
EURUSD: Holding 1.1620 again but equally failing above 1.1600 per my warning here in Friday's update. The pair remains tightly bound in the middle of cross-flow action with decent expiry interest at 1.1600-10 this week.
USDJPY: Finding good support around 113.40 in Friday's extended retreat and some pips banked per my tweet after a cap this time at 114.00 helped by the JPY buying. EURJPY: Support line a little lower at 132.00 now but failing above 132.50 so far with rally sellers poised again as the picture remains murky. USDCHF: 0.9150 the latest support line after that failure at 0.9200 with the SNB ever vigilant but equally sellers remain poised as EURCHF struggles to get back over 1.0700 and EURUSD keeps that 1.1620 support. EURCHF: 1.0660 support now per Friday's orderboard with SNB shadow ever present with CHF demand returning.
AUDUSD: 0.7460 now providing good support as commodities remain firm and softer USD tones prevail overall but sellers at 0.7520 lurking. USDCAD: Support on Friday at the old 1.2320 line returning but failure at 1.2385 amid the softer USD tones and CADJPY demand returning as oil remains perky and off its retreat lows.
Another miserable day supporting the currently very beleagured Shrimpers of Southend United on Saturday. We can only hope the new management team can stop the rot.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.45 BST