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  • Writer's pictureMike Paterson

Pound wobbles again as EU dismiss May's Chequers plan

Friday 21 September 2018

Yet another roller coaster Brexit-related 24 hours for the Pound with ongoing US-China trade war concerns still adding to the general uncertainty.

GBPUSD yesterday rallied to test good resistance/sell interest at 1.3300 on hopes of positive noises from the EU summit but it was all-change when EU representatives and leaders took turns to put the boot into May's "Chequers" Brexit proposal. Cue a reversal down to 1.3227 before running into fresh dip demand but sellers were poised again at 1.3280 and we've fallen down to 1.3206 this morning and remains on the back foot although steadying as I type.

Sellers now poised between 1.3250-60 again then 1.3280 with larger into 1.3300 still and 1.3320.Immediate demand at 1.3200 as we saw this time yesterday then 1.3180 and 1.3160 still then larger into that 1.3130 line again with more around 1.3100. I prefer to take advantage of the rallies to go short still. Make no mistake, all the current media hype aside, yesterday's events were significant and will continue to reverberate but there is still some GBP demand lurking on hopes of a deal eventually.

EURGBP once again held those lower support levels around 0.8850 as GBP initially  rallied but then ran into sell interest around 0.8885 before finally having yet another look at the 0.8920-30 area this morning(GBPEUR down to 1.1205). Sellers still  poised between 0.8920-30 still then 0.8950 and 0.8980-00. Immediate demand around 0.8900, 0.8880 then 0.8850 still and 0.8830,0.8800

EURUSD remains underpinned having broken up through key resistance at 1.1730 with help from EURGBP and EURJPY demand but sellers prevailing around 1.1800 for the moment. Decent line in the sand now building at 1.1760 then 1.1740 with more buyers at 1.1720 and 1.1700 where large option expiry interest lurks today. Sellers poised around 1.1800 still then 1.1830 and 1.1850.

USDJPY continues to find dip demand helped by some general Yen selling and has now rallied further to post 112.87 highs.Sell interest at 113.00 ahead of barrier option defence at 113.50 and 114.00. Bids into 112.50 then 112.30, 112.00 (large option expiry interest too) and 111.80 still. CHF demand has been notable in the wake of any change of rhetoric from the SNB yesterday but we can't rule out them still keeping a close eye on proceedings. USDCHF yesterday fell and took out the decent bids at 0.9600 and has now fallen further to test the next decent line at 0.9650 this morning. More bids at 0.9530 and 0.9500. Sell interest now between 0.9580-00 and 0.9630. EURCHF continues to cap around 1.1320 and has also fallen back on the CHF demand to post 1.1265. Bids at 1.1250 and then larger at 1.1220 still.

AUDUSD is still tightly bound but but has created a support line around 0.7280 for the moment having finally taken out offers at 0.7300.Sellers still at 0.7320 and 0.7350 with immediate demand at 0.7280 then 0.7250 and 0.7220 still. USDCAD is making its mind up again with NAFTA shadows still lurking but has found some dip demand for the moment. Buyers at 1.2880 and 1.2860 with sellers still around 1.2930, 1.2950 then lining up around the pivotal 1.2980 area and 1.3000

Fickle Forex markets ever prevailing, so get your orders in to take full advantage of these moves.

The mighty Shrimpers of Southend United return to the hallowed Hall tomorrow desperate for a win. Let's see if they've finally learnt their lessons from recent below-par performances.

Have a great week-end out there one and all.

Interbank Rate 08.55 BST GBPUSD   1.3220 EURUSD   1.1778 EURGBP   0.8906 GBPEUR   1.1227 USDJPY   112.71 USDCAD   1.2905 USDCHF   0.9571 GBPAUD   1.8135 GBPCAD   1.7063 GBPCHF   1.2657 GBPZAR   18.8536 GBPHKD   10.2495 EURHKD   9.01294

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