More of the same as jury remains out
Tuesday 7 September 2021
The US Dollar finding a little support again this morning amid some firmer US bond yield tones but Forex pairs still tightly bound as markets wait on the return of US markets later today while continuing to second-guess the central banks.
Talking of which the RBA left rates on hold and seemingly slightly less dovish on first sight which saw an AUD rally but in reality the message is still, like other CBs (including BOE's Saunders comments earlier), that they are caught between a large rock and a very hard place and policy change is still some way off.
As we continue to range remember that patience and discipline in trading are key as ever, and not being greedy.
GBPUSD: 1.3850-60 offers duly capping the rally per my tweet yesterday and some pips banked now into 1.3810. I remain a rally seller while keeping an eye on EURGBP and GBPJPY as always. EURGBP: Supported now at 0.8565-70 again and looking at the 0.8600 offers after holding 0.8585 yesterday helped by the 0.8590 option interest I highlighted. The rally is helping to send GBPUSD lower. BOE Saunders' less than hawkish tones earlier may be helping too. GBPJPY: Support at 151.80 again holding a retreat from 152.30. 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: Tested 1.1885 yesterday after holding 1.1850 but finding support in the dips from cross flows.
USDJPY: 109.70 holding latest retreat and now testing 110.00 again as we range tightly. EURJPY: 130.20-30 still supporting but failing in the rally this time at 130.60. USDCHF: Holding 0.9130 this time as EURUSD retreats and with the SNB ever vigiliant and EURCHF steady. EURCHF: 1.0840 still providing support with SNB shadow ever present. Dip buying still the preferred trade but not greedy in the rallies.
AUDUSD: A decent spike into 0.7470 post-RBA algo knee-jerk reaction but providing a good cap and now seeing a retreat through the decent 0.7420-30 support per my earlier tweet. USDCAD: 1.2520 support now amid the firmer USD tones and some potential 1.2540 option support but rally sellers still poised at 1.2560-80. Latest Bank of Canada rate/policy decision lurking on Wednesday.
Woeful from England's cricketers yesterday but credit to India for coming back from an awful start to this entralling Test. One more to go.. Can England level the series ? I'm not holding out too much hope but we've come back before in this series too so its possible but India will be tough to shake off at this stage.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 09.20 BST