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  • Writer's pictureMike Paterson

Ranging still amid variable risk tones

Thursday 26 August 2021

Yesterday saw some better risk sentiment and that helped underpin FX pairs as JPY and CHF selling returned to push cross and core pairs higher. Still ranging overall though and we've seen some retracement this morning so far amid some softer risk tones as COVID and Afghanistan still cast their shadow but even as I type we have some upside momentum returning.

US Federal Reserve Chairman Powell's speech tomorrow at a virtual Jackson Hole at ET 14.00 still the main market focus as far as CB policy is concerned but jury out on whether we get anything of note. As usual, don't try and second guess. The speech comes after trading hours anyhow so caution advised for any extended week-end positions.

Patience and discipline in trading are key as ever and not being greedy.Some good two-way pips to be had so picking your moments and levels are more important than ever.

GBPUSD: 1.3750 finally broke but capped at 1.3770 ahead of the decent size 1.3780-85 sell interest and nowe dropping back through 1.3750 as we continue to range tightly. I remain a rally seller while keeping an eye on EURGBP and GBPJPY as always.EURGBP: Now supported around 0.8550 but sellers poised at 0.8565-70 and 0.8580-85 again.GBPJPY: A good hold of 150.50 yesterday saw a rally to 151.50 on the firmer risk tones before capping and nudging lower again which suits my shorts on core pairs but demand at 151.20.Ranging still amid the variable risk tones.

I remain a GBP rally seller across the pairs but being patient as ever. These are risk sentiment markets and ever fickle so good/tight position management essential.

EURUSD: Support at 1.1730 still with larger interest at 1.1700 amid some option interest there today and tomorrow.1.1780 proving a decent cap so far though.USDJPY: Support now at 109.80 and testing 110.20 again as I type this section after a good hold of 110.00 when I started. EURJPY: 129.00 resistance now good support and testing 129.80 amid the firmer risk tones as I type. Sellers poised though still but has been nudging higher in steady mode.USDCHF: Holding 0.9130 now with the SNB ever vigiliant and some generally firmer USD and risk tones. EURCHF: 1.0750 resistance now providing support with SNB shadow ever present and firmer risk tones prevailing.

AUDUSD: 0.7280 now proving decent resistance after holding 0.7240 and we continue to range tightly with AUDJPY risk flows in play. USDCAD: Still supported at 1.2580 but equally finding sellers above 1.2640 now and the pair still seems tired after last week's extended move higher. CADJPY flows still very much in play amid the variable risk.

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

Interbank rates: 07.31 BST

GBPUSD 1.3742

EURUSD 1.1761

EURGBP 0.8555

GBPEUR 1.1687

GBPJPY 151.27

GBPCAD 1.7332

GBPHKD 10.7074

GBPZAR 20.5200

USDJPY 110.04

EURJPY 129.44

EURCHF 1.0764

EURHKD 9.1618

AUDUSD 0.7254

USDCAD 1.2621

USDCHF 0.9151

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