Pound under pressure still
Monday 18 May 2020
Amid the on-going/renewed/increasing US/China spat and the COVID-19 fallout concerns we're also seeing some further Pound weakness with Brexit trade deal stand-off and implied negative interest rates from December 2020 oontracts onwards after more dovish BOE talk.
Risk sentiment is a little better this morning as European equities open on the up but it's all so fragile and subject to change in this ever fickle FX world as I've been warning constantly.
GBPUSD closed the week in soft mode and per my tweets and I hope the ongoing bearish steer helped make/save you money. A further dip on the Asia thin liquidity opening presented more dip buy/profit taking opportunitinies into 1.2070 but since failing back up at 1.2125. EURGBP continued its march higher on the GBP weakness and once through 0.8900 we headed steadily higher to post 0.8965 (1.1152) in that thin liquidity Asia opening last night.
GBPJPY found support at 130.20-25 again but once broken didn't need much of a shove to post 129.60 then 129.35 in that early Asia GBP fall. Better risk dsentiment currently helping core pairs too as we test 130.00 but sellers remain poised.
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. A little caution advised after strong falls in the past week but sellers remain poised amid the Brexit/negative rates combo.
USDJPY based around 106.80 yet again abut failed above 107.30 with another 2.2bln option expiries today at 107.50 also expected to cap. EURJPY held 115.350 support but failed into 116.20 again as we stay tightly ranged. EURUSD once again held 1.0780 but capped around 1.0850 once more but holding 1.0800 on the retreat amid some better risk.USDCHF duly failed at 0.9750 on Friday where I warned we had large option expiries and as EURUSD rallied with EURCHF still holding 1.0500-20 amid the SNB support.
AUDUSD held 0.6400 yet again helped by some large option expiries but failing into 0.6460 so far amid variable risk plays and AUD still prone to Chinese fallout/retaliation. USDCAD once again found a base around that 1.4020 area I've been highlighting but equally finding sellers at 1.4120 amid variable risk/USD sentiment and oil prices.
You don't need me to tell you that 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.
Interbank rates: 08.37 BST