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  • Mike Paterson

Risk sentiment still fragile

Monday 22 March 2021

The big week-end news for markets was the sacking of his Central Bank head by Turkey's President Erdogan and we've seen large slides in the Lira and Turkish bonds which has given risk sentiment another kicking.

We live in ever fragile times as I've said repeatedly and although markets don't always reflect that we shouldn't be surprised when jitters return. FX prices gapped on the Asian opening but then USDJPY spiked higher again but this pair and others still ranging as per my tweet last night.

The FX jury remains out still so we need to focus on price action and value for money in our entry and exit levels. Discipline and patience needed more than ever in these ever fickle/fragile times.

GBPUSD had found support around 1.3840 on Friday after capping at 1.3950 but then a failure around 1.3880-85 meant more re-sell opportunity per my tweet and lined up a gap on the Asian opening to 1.3840 again as I also tweeted before lows around 1.3820 and bouncing to 1.3875.EURGBP found support at 0.8530-35 yet again on Friday and made steady gains as GBP retreated generally and posted 0.8590 in later NY before capping but decent support line forming at 0.8570-75 then 0.8550. Still sellers poised 0.8600-20.GBPJPY capped this time at 151.80 with rally sellers on core pairs both poised still and softer risk sentiment which then gave the gap on Asian opening from 150.80 to 150.20 but a good base there helped by that USDJPY spike from 105.55 support.

I remain poised to sell GBP into rallies as a jobbing preference but respecting dip demand still with price action ever fickle. Equally a case still for going long in the dips therefore as we continue to range at these lower levels. Patience, entry/exit level and not getting greedy remain key.

USDJPY duly capped above 109.00 then gapped on Asia open amid the Lira/risk wobble but held the strong support line at 108.55 before capping into 109.00 again per my tweets last night. Still ranging overall. EURJPY indeed struggled to hold gains yesterday and found a cap at 129.80 but equally a base at 128.80 after the Asian gap as core pairs found dip buyers on the overdone move. EURUSD has seen a cap at 1.1920 but equally support at 1.1870 in Asia after the over done gap. USDCHF capped at 0.9320 and now falling into 0.9270 again as EURUSD finds support and EURCHF falls on the softer risk tones but with SNB ever watchful.

AUDUSD still finding decent support at 0.7700 after the Asian gap lower but sellers now lining up at 0.7730 and 0.7760. USDCAD found support at 1.2460 this time and made steady progress up to 1.2550 amid the generally firmer USD tones on Friday but now finding 1.2480-1.2530 as immediate range amid variable oil and risk.

Southend once again threw away two points having been handed a win on a plate and the Chairman's response is to hold a zoom call with fans. A bit late for that as we face leaving the Football League for the first time since we began over 100 years ago. Sad times.

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

Interbank rates: 08.43 GMT

GBPUSD 1.3861

EURUSD 1.1897

EURGBP 0.8581

GBPEUR 1.1650

GBPAUD 1.7950

GBPCAD 1.7318

GBPJPY 150.66

GBPCHF 1.2840

GBPZAR 20.4965

GBPHKD 10.7457

USDJPY 108.69

USDZAR 14.7874

EURJPY 129.30

EURCHF 1.1033

EURHKD 9.2237

AUDUSD 0.7721

USDCAD 1.2495

USDCHF 0.9274

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