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  • Mike Paterson

Reality check time again as risk sentiment softens

Wednesday 21 April 2021

After Monday's USD selling, GBP surge and better risk tones it was all change again yesterday as softer equities and global risk provided enough impetus to see a decent retreat just as many were getting very excited about big break-outs higher.

Per my update yesterday where I said "I do feel the GBP moves are over-extended but I do understand why we've seen this move after being very contained for many weeks and months. Often the case but that's not to say it's correct and I'll stay poised to re-sell." The jury is most certainly still out as equities find a little support this morning as I type so don't get carried away.

As always in these fickle times be careful with your trading. Pick your preferred entry/exit levels and don't be greedy or over-analyze. Patience a virtue too of course.

GBPUSD: Failing at 1.4010 a couple of times was enough to tip the scales and then we saw the support lines at 1.3975 and 1.3950 give way to test 1.3910. EURGBP: Failure around 0.8645 this time as EUR retreated. Support currently at 0.8615-20 being tested and rally sellers still lurking.GBPJPY: 152.00 providing the cap and a solid retreat on the softer risk tones with core pairs both finding sellers again but 150.30 holding as some dip demand/profit-taking prevails.

I remain a GBP rally seller across the pairs but still not getting over greedy with expectation on the retreats. Caution advised still as equally a case for buying dips still atm.

EURUSD: 1.2080 duly capped after I noted yesterday that the rally was "not over-convincing" but 1.2000 holding the falls so far.USDJPY: Duly stalled between 108.50-60 and a retreat on the JPY demand but holding 107.80 still with option interest tomorrow and profit-taking helping to underpin as we continue to range tightly.

EURJPY: 131.00 offers capping as I highlighted here yesterday but 129.80 still providing a decent line of support.

USDCHF: Tightly bound still and finding support at 0.9140 as EURUSD retreats and EURCHF treads water.The SNB ever watchful and ready to help. I remain a dip buyer on both pairs.EURCHF: 1.1000 hOlding yet again in the latest retreat helped by the SNB shadow but sellers still poised.

AUDUSD: Yesterday's large option interest between 0.7765-95 duly held up the retreat as per my tweet but since then it's been business as usual with AUDJPY selling notable on the softer risk tones and a test of 0.7700. More expiries in play today and may help contain. USDCAD: 1.2480 held and we've seen a test of 1.2620 amid the softer risk tones/CADJPY selling and underpinned oil tones again.In retreat again as I type as risk firms a little.

Last night sadly saw my beloved Southend effectively lose their football league status by losing to local and relegation rivals. A miracle might save us but I've never been a great believer in those.

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

Interbank rates: 08.36 BST

GBPUSD 1.3918

EURUSD 1.2005

EURGBP 0.8628

GBPEUR 1.1587

GBPAUD 1.8055

GBPCAD 1.7525

GBPJPY 150.49

GBPZAR 19.9317

GBPHKD 10.7999

USDJPY 108.18

USDZAR 14.3115

EURJPY 129.87

EURCHF 1.1015

EURHKD 9.3207

AUDUSD 0.7700

USDCAD 1.2600

USDCHF 0.9177

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