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  • Writer's pictureMike Paterson

Pound finds relief demand after BOE leaves policy on hold

Thursday 7 May 2020

An early start for the Bank of England this morning with their scheduled 06.00 GMT MPC announcement rather than the usual Midday timing that they told us about on 1 May. Interest rates on hold but 2 MPC members did vote for an additional GBP100bln QE.The accompanying Monetary Policy Report paints a gloomy picture moving forward but no surprises there. BOE to deliver a briefing on that at 09.00 GMT.

Elsewhere we've seen variable risk plays and the Euro generally find some dip demand but rallies rightly limited.

GBPUSD looked at 1.2300 in Asia but spiked from 1.2330 to 1.2380 immediately after the BOE but then held 1.2350 as per my Tweet warning before spiking again to test the larger/key resistance area at 1.2420 that I've been highlighting. Re-sells duly made upstairs and some profit taken on retreat into 1.2360 but staying core short.

EURGBP capped at 0.8768 (GBPEUR support 1.1400) and retreated to look at the 0.8700 bids (GBPEUR sellers 1.1480) post BOE but now rallying to 0.8727 as I type.

GBPJPY found good support around 130.50-60 on yesterday's risk-off/GBP selling combo but holding 132.00 on the post BOE rebound as per my earlier tweet. and now back down to 131.50.

I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always.

USDJPY has held 106.00 but failing to get back above 106.50 amid the general risk-off sentiment but where we also have 1.3bln expiries interest that I mentioned yesterday. EURJPY yesterday retreated further to post lows of 114.43 and since held 115.00 on the subsequent rallies on the general EUR supply and risk-off sentiment.

EURUSD has held the strong lines at 1.0780 so far but rallies limited to 1.0825 as the EZ concerns continue.Large option expiries right here at 1.0800 helping to keep the range contained too.

USDCHF has held 0.9730 and rallied to 0.9760 as EURUSD retreats again and with EURCHF holding 1.0520 amid the SNB still supporting.

AUDUSD has capped at 0.6475 again after holding 0.6380 yesterday and looks underpinned for the moment again with large option expiries at 0.6415 and 0.6400 today.

USDCAD has rallied again but this time failed around 1.4170 and since retreating to look at the 1.4080 pivot area.

 *******  1-2-1 Mentoring Session Price Special: ******** GBP 55 per hour from GBP 95 per hour for existing clients.

A special price as a gesture to clients in these strange times and proving to be very popular so don't miss out. You don't need me to tell you that there's lots going on right now, and the foreseeable future, so don't forget to take advantage of my 1-2-1 mentoring sessions if there's areas of trading these volatile markets or how to make best use of the information here 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:  08.45 BST

GBPUSD   1.2395

EURUSD   1.0802

EURGBP   0.8720

GBPEUR   1.1463

GBPAUD   1.9179

GBPCAD   1.7448

GBPJPY   131.72

USDJPY   106.34

EURJPY   114.89

EURCHF   1.0534

AUDUSD   0.6456

USDCAD   1.4089

USDCHF   0.9752

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