Pound struggling to hold gains
Tuesday 8 October 2019
t's been a notably softer Pound this week so far amid unhelpful Brexit tones with rallies short-lived albeit with limited downside for the moment. Reports last night that US and China may have made a little progress on trade talks ahead of talks resuming on Thursday helped risk sentiment but that's fading again already as European trading gets underway. All in the mix then still for a cautious but potentially busy week ahead.
GBPUSD duly capped a couple of times around 1.2330 as a pivotal area and now finally broken down through 1.2280 but finding some more bids at 1.2260. EURGBP has remained underpinned on the generally softer Pound and we've seen a test of 0.8950 (GBPEUR down to 1.1160). GBPJPY has also seen good two-way business again with a failure at 132.20 resulting in another retreat helped by a softer Pound/risk combo in Europe and breaking down to test 131.50 again.
I will continue to rally-sell GBP as my preferred strategy overall too amid the ongoing 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 as the current madness plays out but caution as ever is appropriate. Just ignore the noise, identify the trading ranges, and let the algos do the work. Already plenty of opportunities this week albeit in tight ranges.
EURUSD once again failed to break 1.1000 which continues to be a decent line in the sand but underpinned for the moment again at 1.0965. USDJPY rallied to test 107.50 on the US-China news last night but has fallen again this morning on some softer USD and risk tones with China now responding to the US blacklisting of 28 companies.
USDCHF has found some dip demand again and EURCHF too but rallies tempered by EURUSD capping into 1.1000 again and softer risk sentiment overall.
AUDUSD held 0.6730-0.6735 and rallied to 0.6757 helped by AUDJPY demand on that initial US-China trade news while USDCAD broke down through 1.3300 but holding 1.3280 still.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
Don't forget I offer 1-2-1 mentoring if there's areas of trading this latest volatility that you might need some further help with.
Have a good day out there one and all.
Interbank Rate 08.35 BST