Pound wobbles as General Election looms ever closer. FOMC in focus too.
Wednesday 11 December 2019
Last night saw a rapid retreat on GBP pairs as an election poll showed the Tory lead falling and highlighting the uncertainty around tomorrow's General Election outcome but equally has found some dip demand and rebounding as I type. More certain seems to be the outcome of the US Federal Reserve meeting tonight which is widely touted to keep rates on hold but as always markets will be looking for clues on future policy.
GBPUSD posted fresh highs of 1.3215 yesterday before the rapid fall to test 1.3100 support and currently back to 1.3150. More expiries today at 1.3150-60 (GBP700m) and 1.3185-05 (950m) to contain range.EURGBP has also been on a roller coaster ride accordingly and tested 0.8460 again from 0.8400 before retreating to the pivotal 0.8430 area. GBPJPY has had its own round trip down to test 142.50 from 143.65 before bouncing and now testing 143.00.
Rally-selling GBP remains my preferred strategy overall and worked again last night, but, as I've been warning for a while, I respect that some others (and the algos) see it differently at the moment. Remember we're ranging still so don't get too greedy whatever your bias. I continue to stay poised and sell when upside momentum fades but respecting the current demand still. All focus on tomorrow's election outcome and I will email you some more thoughts/scenarios for that.
EURUSD is tightly bound still with more expiries in play again today, mostly around 1.1100-10 and should help cap rallies.USDJPY is holding 108.50 but still not racing anywhere in a hurry for the moment. USDCHF continues to find some dip demand but on the back foot as EURUSD remains tightly bound but EURCHF finding a few sellers again.
AUDUSD has held 0.6800 again but equally finding sellers above 0.6830. USDCAD also tightly bound between 1.3220-50.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
Have a good day out there one and all.
Interbank rates: 08.45 GMT