Perky Pound amid steady risk mood again
Wednesday 8 July 2020
The happy-clappy brigade are prevailing overall with Chinese equity markets still leading the way, even though US markets turned lower into the close, and the Pound has felt some love on hopes of positive Brexit talks and fresh economic impetus to be announced by Fin Min Sunak later today after PMQs end around 11.45 GMT.
All still very fragile out there though as COVID 19 resurgence fears remain a real threat and the Greenback continues to be a mixed bag. Gold on the other hand is proving ever popular and trading at 9 year highs.
GBPUSD tested larger tested large sell interest at 1.2520-30 for a while before then kicking higher through 1.2550-60 to test supply at 1.2580 then 1.2600 as EURGBP finally fell through 0.9000 and kept on going but some reversal then seen on both. Support coming in now at 1.2530 understandably given the level of resistance there orginally.EURGBP gave up recent gains, and some, amid the GBP demand and with EURUSD really not liking it above 1.1300. The base at 0.9030 gave way then the larger support at 0.9000 and triggered stops down through 0.8980 but held the 0.8960 support line.GBPJPY has enjoyed a run up to 135.40 amid the generally firmer risk sentiment and other GBP demand.
I stay poised to sell GBP rallies overall as my preferred side 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 remains tightly bound still supported by the better risk sentiment but Yen buyers stay poised amid fragile conditions overall and USD uncertainty. Also adding to the tight range are large option expiries between 107.45-55 today. EURJPY is testing the base at 121.20-30 as I type after capping at 121.70 with core pairs both finding rally sellers showing just how fragile the sentiment is out there.
EURUSD failed above 1.1300 again but holding 1.1260 as we continue to range trade with the impact of cross-flows and expiries clearly evident again. USDCHF rallied to test 0.9450 offers/res but retreating to test 0.9400 now as I type as EURUSD heads higher but with the SNB ever vigilant in the dips. EURCHF remains tightly bound between 1.0610-60.
AUDUSD enjoyed the firmer risk sentiment for most of yesterday and saw a run up to 0.6975-80 where we have large expiries today but duly failed and now testing support around 0.6930. USDCAD held 1.3560 then 1.3580 but failed above 1.3620 on its latest rally amid the variable oil/risk/ USD combos.
Lots going on right now, and the foreseeable future, so don't forget to contact me 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: 07.45 BST