• Mike Paterson

Pound and Euro feel the heat

Thursday 13 June 2019

US CPI data came in a bit softer than expected but that hasn't been the main story in the past 24 hours as we've seen the Pound and Euro retreat once again. First we saw the rejection of an attempt to block No-Deal Brexit in parliament followed swiftly by Trump aiming his trade issue sights on Germany/EU and down came those currencies helped by softer risk sentiment once again. Meanwhile the Aussie $ continues to look soft with a weaker than expected jobs report helping it on its way to test recent lows again.

GBPUSD rallied well as EURGBP retreated and helped by USD supply only to fail at the 1.2750-60 sell interest and fall back and we were soon heading back down to test the 1.2720-30 pivot area. Then came the Brexit vote news and we plunged to test the 1.2680 support where we held a few times only to fail at 1.2700 and now posting fresh lows of 1.2662.

EURGBP rallies keep running into sellers as I highlighted yesterday and we saw a good test of the 0.8870 bids ( GBPEUR sellers 1.1275) before rebounding. GBPJPY has also found the sellers prevailing as I've been recommending amid the core pairs turning lower again helped by softer risk sentiment.

I remain GBP bearish overall and continue to rally-sell as my preferred strategy amid all the uncertainty/indecision including Brexit.

EURUSD large option expiry interest yesterday that I warned about helped contain range and pair remained underpinned for a while until failure to progress higher made Euro bulls a little uncomfortable with sellers in other pairs too and as the Trump trade tariff noises came in the pair was poised for a decent correction which we have duly had to test 1.1280.

USDJPY finally broke down through 108.25-30 on the USD supply/Yen demand combo but still finding some decent dip demand while USDCHF is still finding some dip demand as EURUSD retreats but failing to advance above 0.9960 sell interest as EURCHF also turns lower. The SNB this morning left interest rates on hold and repeated their "highly valued Franc" and " will continue to act in FX markets as necessary" mantra .No surprises to any of my readers.

AUDUSD showed no sign of rallying yesterday albeit tightly bound and I noted in my update that sellers remained poised on the bleaker domestic outlook. Cue softer jobs data and down we came in Asian trading to test the strong 0.6900 demand/support. USDCAD staged a decent rally (all relative in these tight FX times) on softer oil but making its mind up still having failed into 1.3350 as oil price found dip demand again.

Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

Have a good day out there one and all.

Interbank Rate 08.30 BST

GBPUSD   1.27683

EURUSD   1.1297

EURGBP   0.8911

GBPEUR   1.1222

GBPAUD   1.8337

GBPCAD   1.6881

USDJPY   108.31

EURJPY   122.36

EURCHF   1.1218

GBPJPY   137.34

AUDUSD   0.6914

USDCAD   1.3313

USDCHF   0.9933

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