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  • Mike Paterson

Range trading still as another week closes

Friday 15 January 2021

Fed Chair Powell duly delivered an either/or speech but disappointed a few hawks by offering no comfort on tapering anytime soon (no shocks there though) then we got the expected c. $2trln COVID rescue package from President-elect Biden but offering little in terms of real infrastructure spend. Cue softer USD and risk overall.

Earlier this morning the UK published some soggy GDP data but not as bad some feared but with much of the key Services sector still in a state of lockdown shock the portents are not great for the next quarter nd the Pound has seen a few sellers re-appear.

The jury is still deciding how 2021 might pan out the ever-fickle world of Forex as risk and USD sentiment continues to vary. Either way, we're seeing some good two-way business so keep your focus on the price action and key levels breaking/holding and don't over analyze or look too far ahead as always.

GBPUSD yesterday duly capped around 1.3700 again a rally on the Powell comments after holding 1.3620 once more earlier in the session and now duly retreating below 1.3650 again. EURGBP duly held the strong 0.8860-70 area (GBPEUR sellers 1.1280) and now back up testing 0.8900 (GBPEUR down to 1.1235) as GBPUSD retreats. GBPJPY is finding support now at 141.50 after a retreat from the pivotal 142.20-30 area, I've often highlighted, amid the softer risk and GBP tones.

I still have a naturally bearish stance on GBP overall and remain poised to sell into rallies but respecting current demand again. Equally going long in the dips proving productive too so take your pick. Just don't get greedy still.

USDJPY duly failed into 104.20-30 again and retreated into 103.60 as per ongoing pattern.Rinse and repeat as we continue to range. EURJPY failed around 126.50 amid some general EUR selling, softer risk and the USDJPY rally fading but has held 125.60 on the retreat. EURUSD has held 1.2100-10 on its further retreat again before capping at 1.2180 on the Powell taper comment rally yesterday and now lower again at 1.2135.USDCHF capped into the key 0.8920 area then still finding support into 0.8850 with the SNB ever watchful but now failing into 0.8900 again as EURCHF drops through 1.0780 amid the general EUR selling.

AUDUSD found support this time at 0.7740 but equally failing around 0.7800 and now testing 0.7730 in the retreat with AUDJPY selling amid the softer risk tones.USDCAD failed above 1.2700 and retreated to test 1.2620-30 on the softer Powell tones but now up testing 1.2700 again amid some softer oil/firmer USD tones.

There's little doubt that we live in strange times and rationale was thrown out the window a long time ago so as we look at trading opportunities to begin the year it's even more important not to over analyze but trade the price action with discipline and patience.

The currently mighty Shrimpers of Southend United FC travel to Grimsby tomorrow in search of at least a point to consolidate the recent happier run. I dreamt last night that we were in mid-table comfort territory. Not sure if it was the sublimal shock that woke me up but I still believe we can escape.

Let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates: 08.45 GMT

GBPUSD 1.3645

EURUSD 1.2137

EURGBP 0.8885

GBPEUR 1.1254

GBPAUD 1.7646

GBPCAD 1.7316

GBPJPY 141.62

GBPZAR 20.6653

GBPHKD 10.5790

USDJPY 103.76

USDZAR 15.1485

EURJPY 125.83

EURCHF 1.0770

EURHKD 9.4002

AUDUSD 0.7736

USDCAD 1.2685

USDCHF 0.8878

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