Perky Pound and risk sentiment again
Monday 15 February 2021
Risk sentiment remains positive overall as equities and commodities/metals continue to stay underpinned but also going nowhere in a hurry. The Pound is finding itself the best of an average bunch again amid happy-clappy vaccine optimism while elsewhere the Japanese PM said they're closely watching FX moves and adding to some JPY supply.
China's week-long Lunar Holiday continues and today the US markets are closed for Presidents Day. Lack of liquidity might add to the usual Monday malaise but equally we can't be complacent.
As if you need reminding I'll repeat again that the Forex jury is ever-fickle amid all the noise so keep playing what's in front of you and don't over analyze or assume anything.
GBPUSD found support above 1.3850 on Friday then 1.3880 in Asia after breaking above 1.3900 but failing into 1.3920 and retreating helped by some expected EURGBP demand around 0.8725-30 I have warned about on Twitter.EURGBP failed at 0.8785-90 and made a solid retreat once through 0.8760 but duly holding 0.8725 where we also have some option interest today rolling off. GBPJPY found a decent base into 145.00 this time and now posting fresh recent highs of 146.25 amid the better risk sentiment and positive GBP with general JPY supply.
I still have a naturally bearish stance on GBP overall and remain poised to sell into rallies but respecting dip demand still with price action ever fickle. Equally a case still for going long in the dips therefore as we continue to range. Patience and not getting greedy remain key.
USDJPY has 104.80 still providing a good base and now posting 105.30 as I type amid some firmer risk sentiment and general JPY supply. EURJPY has made a good base at 127.40 now amid the core pair dip demand and testing 128.00.EURUSD is testing 1.2140-50 again this morning amid the firmer EUR on the crosses and risk tones after finding some dip demand at 1.2100. USDCHF found a good cap at 0.8940 this time as EURUSD rallied with EURCHF bouncing off its lows with the SNB ever watchful and holding 0.8900 as I type.
AUDUSD has duly found support at 0.7720 again thanks to those options I highlighted but failing into 0.7800 so far. USDCAD duly found a good cap at 1.2760 and has retreated to test the other end of the current range at 1.2660 amid softer USD/firmer oil tones.
A great away point away at top of the table Cambridge for the mighty Shrimpers of Southend on Saturday but England's cricketers will be lucky to get away with a defeat in more than 4 days let alone a draw. What a difference a Test makes, as we expected deep down surely....
Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good week everyone.
Interbank rates: 08.45 GMT