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  • Mike Paterson

Pound in a whirl still amid COVID, BOE and risk concerns

Tuesday 22 September 2020

Pound in a whirl amid COVID, general risk concerns and Bailey

No need to repeat what I've been saying about the general risk-off vibe and volatility but BOE's Bailey has kept markets busy this morning with his Yes/No comments on negative rates.

A sharp fall in the Pound on his initial comments that negative rates were all part of the mix was reversed shortly after when he then said that wouldn't happen at the moment. Central Banks continue not to have a clue.

GBPUSD has been down to 1.2712 this morning thanks to the initial Bailey comments after an earlier shove down through 1.2780 helped by the 07.00 GMT algo. Back to 1.2835 since but falling again as I type. Rinse n repeat still. EURGBP duly found support at 0.9150-60 as GBP weakened, then 0.9180 and made a sharp dash higher this morning through 0.9200 to post 0.9220 but since back down to 0.9150 again as GBP rallies on the no neg rates at the moment vibe from Bailey. GBPJPY currently seeing a sharp reversal from 133.20 amid the GBP rally but still prone to the softer risk tones.

I stay poised to sell GBP rallies as my preferred side and buy back in the dips as ever.  Patience continues to be a virtue and entry level key as always. I still see dip demand though with markets still in a state of uncertainty overall.

USDJPY is now ranging 104.30-80 for the moment after yesterday's hold of 104.00 but JPY risk-off demand capping the subsequent rally. EURUSD has been falling further amid some EURJPY and now EURGBP supply but finding support at fresh recent lows of 1.1720.USDCHF capped into 0.9180 but has a decent line of support now at 0.9140.

AUDUSD has made a decent retreat to test 0.7180 after breaking down through the 0.7280 support amid the risk-off AUDJPY supply. USDCAD has broken up through 1.3250 on the softer oil/CADJPY supply/firmer USD combo but failing at 1.3350 so far.

Markets are ever-fickle so don't forget to contact me if you need some further help with.

I wish you good trading and let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates:  09.40 BST

GBPUSD   1.2825

EURUSD   1.1746

EURGBP   0.9159

GBPEUR   1.0912

GBPAUD   1.7778

GBPCAD   1.7057

GBPJPY   133.96

USDJPY   104.53

EURJPY   122.70

EURCHF   1.0755

AUDUSD   0.7207

USDCAD   1.3310

USDCHF   0.9161

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