Risk-off sentiment returns

Wednesday 1 April 2020

A new month of uncertainty is underway and we're seeing some risk-off sentiment prevailing in Asia and early European trading. Certain correlations have not been so evident in recent days/weeks so let's see what pans out.

A lot will depend ofc on the spread/accelration or reduction in Covid-19.We must take it one day at a time. Don't overthink and let the flow be your friend. Think about position size too in order to be able to cope with the volatility/whipsaws and yet stay in the game to back your view. I wish you a profitable and safe month ahead.

GBPUSD capped at 1.2473 yesterday in the aftermath of some London 4pm fix volatility that I warned about here and on Twitter. Duly resold some shorts and now taken some profit on the latest retreat to 1.2330.EURGBP fell to 0.8860 (GBPEUR up to 1.1286) on the generally strong GBP demand with little evidence of any final-day month-end demand as I had warned here. GBPJPY capped around 134.50 and since at 133.80 amid the risk-off selling on core pairs too.

I stay poised to sell GBP rallies and buy back in the dips as ever. Obviously still seems to be some natural demand which I respect of course but the overall picture remains less clear still imho. Patience continues to be a virtue and entry level key as always.

USDJPY has fallen to look at 107.25 amid the risk-off but finding some decent dip demand down there again while EURJPY has dropped below 118.00 on the risk-off sentiment and some general EUR supply after capping into 119.50.EURUSD capped into 1.1050 and now testing 1.0930 support on the retreat helped by risk off plays and that general Euro supply.USDCHF based at 0.9600 from 0.9685 highs but since rallied to 0.9665 as EURUSD falls and helped by some EURCHF dip demand at 1.0560-70 again. SNB still ever watchful.

AUDUSD has retreated to test 0.6052 after capping yesterday at 0.6172 helped lower by some renewed ADJPY supply.USDCAD cpped above 1.4330 but since found a base at 1.4020 amid softer oil still and rallied to 1.4209 amid the general USD demand and risk-off CADJPY supply.

Fickle Forex markets ever prevailing so be ready to jump on moves with your entry/exit levels and orders as always. Caution advised as ever if you're not sure.

Lots going on right now, and the foreseeable future, so don't forget that I offer 1-2-1 mentoring if there's areas of trading these volatile markets that you might need some further help with.

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

Interbank rates: 08.20 BST

GBPUSD   1.2349

EURUSD   1.0973

EURGBP   0.8884

GBPEUR   1.1254

GBPAUD   2.0336

GBPCAD   1.7514

GBPJPY   132.83

GBPZAR   22.2757

GBPHKD   9.5742

USDJPY   107.56

USDZAR   18.0384

EURJPY   118.03

EURCHF   1.0573

EURHKD   8.5074

AUDUSD   0.6069

USDCAD   1.4180

USDCHF   0.9633