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Pound under pressure after BOE

Friday 19 June 2020

Yesterday the BOE left rates on hold but added £100bln in QE which was the lower end of expectations amid some undertandably cautiuous tones. Markets took the Pound higher initially as it was the less dovish of expectations but since then we've seen a further retreat amid further risk-off sentiment generally with GBPJPY selling notable once again and Brexit reality-check still in focus.


China says it will accelerate purchases of US farm products and that's given sentiment a little boost this morning but it's all still very fragile out there. There's an EU summit currently underway to discuss the EU Recovery Fund amongst other matters including Brexit. No decisions expected as Merkel pointed to yesterday but just look out for any news bombs that the algos might grab hold of.


GBPUSD fell to test 1.2475 prior to the BOE announcement but rallied on the news only to fail into 1.2550-60 again and we've been down to test 1.2400. EURGBP has continued its rally to test 0.9030 (GBPEUR down to 1.1060) while GBPJPY peaked around 134.30 and been down to 132.40 on the softer risk helping to keep pressure on core pairs still.


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. I still expect to see some dip demand though given the recent rallies.


USDJPY failed into 107.20 and we've been down to 106.67 again. Rinse n repeat still. EURJPY failed around 120.50 but finding support/demand into 119.60 on the retreat but failing above 120.00 on the bounce amid generally softer risk.EURUSD is finding expected support between 1.1180-1.1200 but rallies not impressive either amid cross-pair flows. USDCHF is still holding 0.9480 but failing above 0.9520 again as EURCHF retreats once more but with the SNB seemingly drawing another line under it.


AUDUSD failed again above 0.6900 and had its own retreat again to test 0.6830-35 again amid the softer risk but still finding some dip demand. USDCAD failed into 1.3620 again but another retreat since to post 1.3570 on some firmer oil price action.


We know 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 order boards and expiries, 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. Make sure you get some rest over the week-end.


Interbank rates:  08.30 BST

GBPUSD   1.2431

EURUSD   1.1211

EURGBP   0.9016

GBPEUR   1.1089

GBPAUD   1.8113

GBPCAD   1.6887

GBPJPY   132.98

GBPZAR   21.5826

GBPHKD   9.6370

USDJPY   106.97

USDZAR   17.3802

EURJPY   119.98

EURCHF   1.0654

EURHKD   8.6906

AUDUSD   0.6863

USDCAD   1.3584

USDCHF   0.9504


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