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  • Mike Paterson

Risk-off sentiment greets the new week.

Monday 19 July 2021

Equities, commodities and US bond yields all lower as the new week gets underway amid rising Covid concerns not least of which in the UK and we've seen further declines in the Pound helped by increased JPY demand driving GBPJPY lower in a double whammy.

CAD weakness notable as oil prices move lower in the wake of OPEC+ decision at the week-end to increase supply by 400bpd through year-end.

Patience and discipline in trading are key as ever and not being greedy as we continue to range tightly overall but good to see some greater levels of intra-day volatility return.

GBPUSD: A failure to get back above 1.3800 set the tone late in the day on Friday and after capping at 1.3780 then 1.3760 we've seen declines into 1.3700 this morning with risk-off GBPJPY selling also helping to cap. Rising COVID cases amid lockdown easing in the UK with senior government figures in isolation not helping to ease fears. I remain a rally seller while keeping an eye on EURGBP and GBPJPY as always. EURGBP: Capped by the 0.8600 sellers but equally finding support below 0.8580 this morning so far as GBP sentiment remains soft. GBPJPY: A steady retreat through 150.50 as I type having capped at 151.50 amid the risk-off selling.

I remain a GBP rally seller across the pairs but being patient as ever and that's now reaping more rewards. I hope the steer has helped. Risk to the downside still overall.

EURUSD: I've been warning that rallies remain weak and having capped this time at 1.1820 we've finally seen a break below 1.1780, now testing 1.1760 amid EURJPY supply and USD demand. USDJPY: Capping at 110.10 this time but holding 109.70 in the latest retreat so far amid the risk-off JPY demand.EURJPY: 129.80 support line broken now and testing 129.00 after capping at 130.00.USDCHF: A good hold of 0.9180 as EURUSD retreats anbd EURCHF remains underpinned with the SNB ever vigilant. EURCHF: A good hold of 1.0800 which I highlighted yesterday and now forming a decent line at 1.10830 with SNB shadow/help ever present but rally sellers still poised amid the variable risk tones.

AUDUSD: AUDJPY selling and USd demand helping to push the pair down through 0.7380 and now testing 0.7350.USDCAD: Sellers at 1.2600 now history as the pair surges higher to 1.2730 on the firmer USD, softer oil and CADJPY selling triple whammy. Heady highs perhaps from those post-BOC 1.2450 lows but now underpinned at 1.2650-60.

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

Interbank rates: 08.50 BST

GBPUSD 1.3720

EURUSD 1.1780

EURGBP 0.8582

GBPEUR 1.1650

GBPJPY 150.75

GBPZAR 19.8895

GBPHKD 10.6371

USDJPY 109.84

USDZAR 14.5122

EURJPY 129.45

EURCHF 1.0850

EURHKD 9.1306

AUDUSD 0.7370

USDCAD 1.2698

USDCHF 0.9211

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