Pause button pressed again as markets wait on NFPs
Friday 6 December 2019
After some decent moves across a number of pairs this week we've seen some consolidation in the past 24 hours as markets and algos wait on today's key US Non Farm Payroll/jobs data. Risk is variable again amid reports that US-China trade talks are still progressing ok but tempered by China saying they will take counter measures against recent sanctions imposed by the US on certain Chinese officials.
Elsewhere the Pound has also paused for reflection after this week's strong gains with the General Election very much in focus and the outcome uncertain until the votes are actually counted. Meanwhile oil prices are underpinned but waiting on the outcome of the current OPEC meeting and we'll see then how much has already been priced in.
GBPUSD had a run up to 1.3170 but EURGBP has held 0.8430 and that's also helped cap Cable along with some GBPJPY supply. EURGBP has bounced again from those 0.8430-35 bids and posted 0.8460 (GBPEUR down to 1.1808) but remains tightly bound as EURUSD clings to 1.100 with more option expiry interest there today. GBPJPY has retreated again after posting those 7-month highs and now testing bids at 142.50.
Rally-selling GBP remains my preferred strategy overall but, as I've been warning for a while, I respect that some others (and the algos) see it differently at the moment. Remember we're ranging still so don't get too greedy whatever your bias. I continue to stay poised and sell when upside momentum fades but respecting the current demand still.
EURUSD is holding above 1.1100 with another EUR 2.5bln in option expiries rolling off today this time between 1.1090-1125. USDJPY failed get through 109.00 yesterday capped by the expiries I highlighted but equally holding 108.50 for the moment. USDCHF continues to find demand around that 0.9850 support area but equally still can't get back above 0.9900 with EURCHF still finding a few sellers but the SNB ever vigilant.
AUDUSD has found itself tightly bound still too between 0.6800-50 amid the variable risk sentiment. USDCAD remains on the back foot amid some general USD supply and the OPEC meeting underpinning oil prices and therefore supporting the Canadian $.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
Don't forget too that I offer 1-2-1 mentoring if there's areas of trading these tight ranges, or how to make best use of the order boards and expiries, that you might need some further help with. I will help develop your powers of trading discipline and psychology all learned in my 38 years in FX, including 20 as a market maker.
Remiss of me yesterday not to recognize the sad passing of England bowling legend Bob Willis who I had the pleasure and privilege of meeting on a few occasions. A thoroughly decent man who will be forever etched into Ashes history.
Tomorrow sees the Shrimpers travel to Bristol Rovers now managed by two ex-Roots Hall legends but they won't be doing us any favours. We'll go with some heart though after a well-deserved midweek point at Burton.
Have a good day/week-end out there one and all.
Interbank rates: 08.19 GMT