Perky Pound amid firmer risk sentiment

Thursday 2 July 2020

Seems like the happy-clappy brigade are in charge again for the moment as the woes of the world disappear and the glass is half full again. I don't agree but hey, markets and algos are what they are.

Patience always a virtue in forex. Today's US NFP data will be keenly awaited, a day early due to the US Independence Day holiday tomorrow. I don't do predictions as you know so just be poised with entry/exit levels and orders and let the algos do the work so you can jump in as suits.

GBPUSD is enjoying a good run higher amid the risk-on sentiment helped by GBPJPY demand and EURGBP selling now that month-end demand is out of the way. The pair found a good hold around 1.2380 then again at 1.2460 and now posting 1.2508 as I type. I warned yesterday not to get too greedy and I've been warning also about dip demand so I'm happy to sit on the sidelines for the moment. EURGBP has continued its retreat and tested 0.9000 before finding some support as EURUSD popped higher amid some general USD weakness. GBPJPY found a base at 133.00 and has enjoyed the risk-on rally to break 134.00 as USDJPY finds dip demand on the general Yen selling and GBP enjoys the joy ride.

I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. I still expect to continue seeing some dip demand but cross-flows and Brexit will produce a mixed bag moving forward.

USDJPY has been tightly bound between 107.30-60 with the general USD supply tempering the JPY selling while EURJPY found a base at 120.25 and then 120.80 post to 121.27 as I type amid the risk-on plays.

EURUSD duly found support into 1.1185 again before breaking higher and holding above the 1.2240-50 pivot area to now test 1.1300 offers. Lots of option expiries again today to help keep range contained.USDCHF capped at 0.9500 and fell as EURUSD rallied but holding 0.9420 for the moment with the SNB ever vigilant in the dips to keep a bid under EURCHF.

AUDUSD duly held 0.6880-85 where we had those large option expiries yesterday and has rallied to test 0.6950 but fell back to look at 0.6900 where we have even larger expiries today as per yesterday's tweet. USDCAD has found a base at 1.3550 again but failing above 1.3600 amid the firmer oil price and risk sentiment with CADJPY demand playing out.

Lots going on right now, and the foreseeable future, so don't forget to take advantage of my 1-2-1 mentoring sessions if there's areas of trading these volatile markets or how to make best use of the order boards and expiries, that you might need some further help with.

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

Interbank rates:  08.50 BST

GBPUSD   1.2500

EURUSD   1.1277

EURGBP   0.9021

GBPEUR   1.1087

GBPAUD   1.8038

GBPCAD   1.6983

GBPJPY   134.33

GBPZAR   21.1594

GBPHKD   9.6913

USDJPY   107.45

USDZAR   16.9023

EURJPY   121.18

EURCHF   1.0651

EURHKD   8.7411

AUDUSD   0.6930

USDCAD   1.3584

USDCHF   0.9444