Risk sentiment improves but jury still out
Monday 5 October 2020
Trump's release from hospital is expected for today and that's given risk trades an optimistic start to the week but the overall market sentiment remains fragile.
UK's Johnson had his Brexit call with EU Commission President von dey Leyen and while they both agreed that a deal could be done they also both said that it still remains a long way off with the clock ticking.
UK Services PMI UK data just out better than expected but some key levels still holding for the moment at 137.00 and 0.9050 and 1.2960-70 as per my tweet. GBP should still stay underpinned in the dips though if risk tones remain positive. US Markit and ISM Services/Composite comes later after some less than impressive jobs/wages numbers on Friday but Trump's condition will still be the real focus as the day progresses.
GBPUSD has found a base at 1.2850 but there's a line developing around 1.2960 which is under attack as I type with GBPJPY demand notable on the better risk tones. EURGBP similarly has found a base at 0.9050 but failing into 0.9100 and retreating this morning back to 0.9060 as GBP finds support. GBPJPY currently underpinned again on the better risk plays providing core pair dip demand and now testing the previous cap at 137.00.
I stay poised to sell GBP rallies as my preferred side and buy back in the dips as ever. Patience continues to be a virtue and entry level key as always. I still see dip demand though with markets still in a state of uncertainty overall.
USDJPY is looking to test 105.70 again on the better risk after holding 105.25. EURJPY also higher on the better risk tones. EURUSD still caught up in cross pair flows and underpinned now at 1.1700 but equally rally sellers remain poised. USDCHF failed at 0.9220 again but has held 0.9160 so far as EURUSD rallies but EURCHF also finds dip buyers on the better risk plays and SNB casting its shadow.
AUDUSD being driven higher from a 0.7160 base by the AUDJPY demand but sellers remain poised into 0.9200. USDCAD retreating to 1.3270 from Friday highs of 1.3330 on the firmer oil/CADJPY demand.
Markets are ever-fickle so don't forget to contact me if there's areas of trading these markets that you might need some further help with.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 09.32 BST
GBPUSD 1.2953
EURUSD 1.1741
EURGBP 0.9066
GBPEUR 1.1028
GBPAUD 1.8044
GBPCAD 1.7189
GBPJPY 136.79
GBPZAR 21.2440
GBPHKD 10.0440
USDJPY 105.64
USDZAR 16.4064
EURJPY 124.03
EURCHF 1.0772
EURHKD 9.1077
AUDUSD 0.7177
USDCAD 1.3272
USDCHF 0.9175
