Pound finds support amid hopes for fresh Brexit deal
Friday 20 September 2019
Yesterday Juncker gave GBP bulls hope that a new Brexit deal could yet be worked out and the algos duly delivered a spike despite others in the EU being less than embracing. Buy rumour sell fact? The full interview gets broadcast on Sunday. All out there still and with the UK Supreme Court ruling due anytime/early next week markets will continue to second guess.
Elsewhere the usual suspects re oil, trade, CB second-guessing, and other areas of concern remain in the mix as another fickle Forex week ends and week-end risk looms.
Yesterday saw the BOE keep everything on hold as expected and the subsequent dip once again held the pivotal 1.2430 area I have been highlighting. Bulls were duly encouraged and as per my BOE preview where I said there was an equal case for GBP longs we headed back up to test 1.2500 only to fail again before that Juncker-led spike from 1.2485 to break 1.2530, triggering stops to 1.2560 then 1.2581 before retreating to 1.2445 as I type. EURGBP broke down through 0.8800 bids/support triggering stops to post lows of 0.8785 (GBPEUR up to 1.1382). Euro dip-buyers again prevailing though with month-end demand once again approaching. GBPJPY has also seen some good two-way action this time holding 134.30 to post 135.75 in the general GBP rally.
I will continue to GBP rally-sell as my preferred strategy amid all the uncertainty/indecision including Brexit/political fallout but happy to buy back in the dips as always.Rinse and repeat.Still no reason to change my view any time soon despite the latest bullish noises from Juncker. The UK Supreme Court will deliver its verdict on the legality of Johnson suspending Parliament and whether he misled the Queen and remains very much in the overall mix.
EURUSD remains tightly bound with large option expiries helping to contain in 1.1020-70 range atm. while USDJPY duly held 108.75-80 earlier after its failure to hold above 108.00 and also remains range bound.USDCHF has also dipped through 0.9900 but finding support at the next layer of bids at 0.9880.
AUDUSD has tested 0.6780 again but rallied to post 0.6809 before retreating and remains on the back foot amid expectations of more cutting action from the RBA.USDCAD tested 1.3300 but once again failed only to hold 1.3240 this time with good two-way pips to be had still amid the variable oil/USD sentiment.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
Tomorrow the currently soggy Shrimpers (on and off the pitch) travel to MK Dons desperate for points having scored 3 goals away from home on Tuesday and still losing. Yep, times are definitely tough right now but we'll keep believing.
Talking of which the Rugby Union World Cup starts today in Japan. Come on England !!
Have a good day/weekend out there one and all.
Interbank Rate 08.10 BST