Perky Pound amid weaker Greenback still
Tuesday 1 September 2020
Hi again everyone and I hope, like me, you enjoyed the long week-end break.
The Greenback remains under pressure and the Pound made the most of those month-end flows to return to the top of the winners rostrum as we wait to see what develops in the new month ahead. US equity prices continue to soar on the ultra-cheap money scenario and it seems, for the moment at least, that little is likely to change but we must always expect the unexpected and not get compacent. Plenty of underlying reasons for a wobble/reversal but the trend, as they say, is your friend. We await and will continue to monitor/trade with interest.
GBPUSD continued its rally and found an extra kick on the last day of the month yesterday to push on through 1.3360, 1.3380 and 1.3400 triggering stops along the way before capping at 1.3443 so far this morning after holding an early test back at 1.3400.EURGBP tested more support/bids into 0.8900 but has since bounced back to 0.8965 again helped by some final month-end demand before retreating but finding support into 0.8920 now.GBPJPY found a new base at 140.80 before rallying strongly on the better risk/GBP demand combo before capping at 142.00
I stay poised to sell GBP rallies overall as my preferred side and buy back in the dips as ever but patience will continue to be a virtue and entry level key as always. I still expect to continue seeing dip demand.
USDJPY continues to range 105.50-106.50 amid the generall softer USD/risk-on JPY selling combo and good two-way business being seen.EURJPY remains underpinned but still can't find a way through 126.80-00 as core pairs still find some rall-sell supply and variable risk tones.EURUSD has enjoyed its own USD-supply rally to test 1.2000 but some large option expiries there today helping to cap. USDCHF has found a base at 0.9000 (possibly SNB) as EURUSD falters into 1.2000 and helped by a firmer EURCHF once again after holding that key 1.0730-50 area.
AUDUSD has also enjoyed the USD supply and now found a base at 0.7350 to post fresh recent highs of 0.7413. USDCAD capped at 1.3120 this time on the general USD selling and now testing 1.3000 as I type as the USD supply/steady-firmer oil combo continues.
Markets are ever-fickle so don't forget to contact me if there's areas of these markets 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: 08.07 BST