Pound prevails as another week gets underway
Monday 23 November 2020
Strong gains for the Pound this morning on some positive Brexit and COVID vaccine news.
Nothing confirmed on the reports of a Brexit deal to be signed off this week so we should remain cautious as ever but meanwhile the algos and therefore markets continue to drive the Pound higher amid some generally better risk sentiment. As for the encouraging vaccine news we are still some way off seeing the positive economic effects but the algos/investors definitely in glass half-full mode again for the moment at least.
PMI data prelims out this morning for EZ and UK have understandably done little to move prices too far.
GBPUSD has been up to test 1.3380 so far having opened above 1.3300 in Asia. Some re-sells made made in the latest rally but with added caution for the moment. If you've been trading long then you will definitely be encouraged by the rising base but would still wise to take some profit in the rallies too. Big levels to watch now 1.3400-20 and 1.3480.EURGBP broke down through the 0.8920-25 support in Asia and now tested 0.8875-80 ahead of the big line at 0.8860-65 still.GBPJPY has found a cap around 138.80 after its strong risk/GBP led rally but bids building at 138.50.
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 rally-selling in GBPUSD is still bringing some reward but entry level key as always. Definitely still expecting dip demand as I've warned for a while now. Brexit still a large elephant in the room.
USDJPY held 103.60 yet again but tempered again above 103.80 by some softer USD generally. EURJPY still holding 123.00 and back up to 123.30 as the two-way business continues. EURUSD holding 1.1850 and now testing 1.1880 again as I type but still tightly bound and caught up in the cross flows still. USDCHF has held 0.9080-00 again but struggling to rally too far as EURUSD finds dip demand with EURCHF steady but the SNB still ever watchful.
AUDUSD held 0.7280 amid the softer USD/better risk tones and now testing 0.7330 again while USDCAD held 1.3030 but failed above 1.3100 again on the softer USD tones and steady oil price and now testing 1.3050 again as I type.
Markets are ever-fickle so don't forget to contact me if there's areas 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. Have a good week.
Interbank rates: 08.45 GMT