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  • Mike Paterson

Pound and equity markets wobble yet again

Tuesday 23 October 2018

Yesterday I reported some risk-on sentiment as the Chinese equity market staged the biggest one-day rally in 3 years but also highlighted the ongoing risks with Brexit/May et al. Well the equity market rally has been short-lived with further tumbles today and yesterday the Pound duly got slapped lower as markets belatedly responded to the Brexit/May shambles.

GBPUSD has been down to 1.2937 in early European trading but rallied sharply to test sell interest/res at 1.3000 as the Greenback comes under softer equity pressure. More offers at 1.3020, 1.3050, 1.3080 and 1.3100.Immediate demand now at 1.2980 then around 1.2960 again that held yesterday's initial retreat then 1.2930, 1.2900 and 1.2880. I remain a GBP rally seller but still not getting too ambitious for the momen so happy to buy back in the dips and the strategy continues to work well.BOE's Carney and Haldane both up to the mic today but not expected to shake things up.

EURGBP has been up to 0.8857 (GBPEUR down to 1.1290) but sell interest up there prevailed and we've retreated this morning to post 0.8823 (GBPEUR 1.1335) rolling off there today proving a bit of magnet and that retreat is helping to put a bid under GBP generally. Sellers still poised between 0.8850-60 then larger at 0.8880 and 0.89002. Immediate bids/support at 0.8820, 0.8800 and 0.8780-85.

EURUSD has failed again above 1.1500 and been down to post lows of 1.1439 this morning before also rallying on the softer US$ tones to test 1.1480. No option contracts of note rolling off today but bids/support at 1.1430, 1.1400 and 1.1385 with sellers poised at 1.1480-85 then 1.1500, 1.1530 and 1.1550-60 still.

USDJPY duly failed above 112.80 again and has been down to 112.27. No option contracts of note rolling off today but bids/demand now around 112.20 still then 112.00 and 111.85 still with immediate sell interest at 112.50 then the larger interest between 112.80-113.00. I remain a rally seller still for the moment. USDCHF has had another look at 0.9980 before also retreating this morning helped by renewed EURCHF selling down to test 1.1400 support. Bids/support remain there and 1.1380 with sellers now at 1.1450 then between 1.1480-00. USDCHF bids still at 0.9930 then 0.9900 and 0.9880 with sell interest around 0.9980 still then larger into 1.0000. I remain a dip buyer on both.

AUDUSD still remains on the back foot (you've heard that from me a few times recently) and has fallen to test 0.7050 after holding 0.7090 until those options that I mentioned yesterday rolled off. Immediate demand still at 0.7045-50 then 0.7030 and 0.7000 with sellers poised now around 0.7100 then 0.7130 and 0.7150 still. USDCAD has been trading relatively tightly with focus still on tomorrow's BOC interest rate meeting where a hike is widely expected and that is helping the Canadian $ a little in the near term.Immediate sell interest still at 1.3120 then 1.3150 with buyers at 1.3060, 1.3030 and 1.3000.

Fickle Forex markets ever prevailing so get your orders in to take full advantage of these moves.

Tonight the mighty Shrimpers of Southend United remain at the hallowed Hall with another league game after Saturday's dismal display so we'll be hoping for better things and lessons learned.

Have a good day out there one and all.

Twitter: @MSPFX and @MikePatersonFX

Interbank Rate 08.50 BST

GBPUSD 1.2985

EURUSD 1.1540

EURGBP 0.8827

GBPEUR 1.1327

USDJPY 112.33

USDCAD 1.3088

USDCHF 0.9958

GBPAUD 1.8339

GBPCAD 1.7002

GBPCHF 1.2938

GBPZAR 18.6658

GBPHKD 10.0696

EURHKD 8.8900

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