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  • Writer's pictureMike Paterson

Risk appetite improves as a new week gets underway but jury still out.

Monday 23 August 2021

There were signs of a turnaround on Friday and and that's continuing into the new week with focus on Jackson Hole this week-end now being a virtual event and expectations of any major announcement from Fed Chair Powell fading. Bitcoin back above $50k helped by the news that Paypal will now be adding the UK to its list of crypto services.

Oil is higher as are equities and gold is off its lows with the US Dollar generally lower amid the Jackson Hole disappointment for the tapering hawks but the better risk tones see a return of some JPY and CHF selling which is also helping to underpin cross and core pairs now.

Flash PMI the data focus today and we might expect some knee-jrk reaction if wide of the mark but its the not key release it was amid the COVID fallout uncertainty still.

Patience and discipline in trading are key as ever and not being greedy.Still some good two-way pips to be had as the jury remains out so picking your moments and levels are more important than ever. These moves are now extended by recent range terms as I warned last week so some caution is required. Equally we are not out of the woods yet and Afghanistan still casts an ugly shadow.

GBPUSD: A good hold of 1.3600 on Friday and pips banked along the way again per ongoing strategy. 1.3660-65 proving a decent line of resistance though since. I remain a rally seller while keeping an eye on EURGBP and GBPJPY as always.EURGBP: Now supported around 0.8565 but failing at 0.8600 after breaking through those 0.8580-85 offers as we continue to range tightly.GBPJPY: That 149.20 area I highlighted on Friday duly held but we're capping at a former line at 150.20 so far as the risk jury remains out.

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: Capped at 1.1720-25 and re-sells duly placed but finding support at 1.1700 amid the better risk cross flows

USDJPY: Capping into 110.00 after a good hold of 109.60 helped by the renewed JPY supply. EURJPY: 129.00 providing resistance after a hold of 128.30 amid the better risk tones.USDCHF: Yet another failure into 0.9200 on the softer USD tones and now testing 0.9140-50 support but with the SNB ever vigiliant and some general CHF supply helping to support. EURCHF: 1.0745 now capping after holding 1.0700 with SNB shadow ever present but sellers poised.

AUDUSD: Finding a cap at 0.7165 after holding 0.7100 and rallying amid the risk-on AUDJPY buying but sellers still poised as the jury remains out. USDCAD: Capping at 1.2950 and the solid rally last week started to fade on Friday and now down looking at 1.2750 amid firmer oil and softer USD tones plus CADJPY demand, for the moment at least.

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

Interbank rates: 07.55 BST

GBPUSD 1.3650

EURUSD 1.1712

EURGBP 0.8580

GBPEUR 1.1654

GBPJPY 150.06

GBPCAD 1.7405

GBPZAR 20.8193

GBPHKD 10.6334

USDJPY 109.94

EURJPY 128.75

EURCHF 1.0731

EURHKD 9.1242

AUDUSD 0.7160

USDCAD 1.2765

USDCHF 0.9165

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