Ranging still as another week gets underway
Monday 25 May 2020
Welcome to another week and a holiday today here in the UK and US so we can expect some range containment still whilst not forgetting the thin liquidity conditions prevailing which could provide some volatility.
US-China tensions and COVID-19 fallout concerns continue but despite that we're not exactly seeing a lot of risk-off sentiment but some USD demand as we continue to range tightly.
GBPUSD has continued in a 1.2150-1.2220 range. Lots of headlines here about the refusal by Johnson to sack his chief adviser on COVID isolation breaches but not having any real impact so far.EURGBP is holding 0.8930 still and with month-end demand in the pipeline this week I would expect any break lower to be limited.GBPJPY has found support from some core pair demand with USDJPY currently holding 107.50 and GBPUSD 1.2160 but sellers remain poised.
I continue 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.
USDJPY has held 107.50 but struggling to get back above 107.80 on the fragile sentiment. Rinse n repeat still.
EURUSD failed to break 1.0885 on Friday with those large expiries in play but the rallies were weak as I higlighted in a tweet or two. We've broken down now though to post 1.0871 but decent buy interest at 1.0855-65 still.USDCHF found support into 0.9700 with EURUSD remaining soft but rallies tempered above 0.9735 by EURCHF giving up gains above 1.0600 again. No doubt the SNB are still "smoothing" though.
AUDUSD duly held 0.6500 with the help of Friday's option expiries I highlighted here and tweeted but failing to get back above 0.6550 amid the China tensions backdrop again.USDCAD failed into 1.4050 on Friday but holding 1.3975 on the retreat as I type having faiiled above 1.4000 in Asia.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.50 BST