Risk sentiment still fragile as another week ends
Friday 9 August 2019
The PBOC once again set the USDCNY reference rate above 7 but lower than expected and we've seen some variable risk plays since but overall it's all very fragile out there still with the US reportedly telling companies not to deal with with Huawei in retaliation to China's halting of US agricultural goods.
GBPUSD had a brief look below 1.2100 again yesterday but then failed to rally through 1.216o and has been tightly bound but on the back foot since amid all the Brexit bs and this morning's release of soggy Q2 GDP, trade balance and UK production data with EURGBP holding 0.9250 and GBPJPY selling once again.
EURGBP has retreated to test 0.9200 amid some general EUR supply initially but remains underpinned with a break of 0.9250-60 still the target.GBPJPY fell again as I warned but has held above 128.20 so far.
I remain GBP bearish overall and will continue to rally-sell as my preferred strategy amid all the soggy data and uncertainty/indecision including Brexit/political fallout.No reason to change my view any time soon.
USDJPY has been back down to post 105.72 amid the fragile risk sentiment having once again held capped at 106.30 while USDCHF remains tightly bound as does EURCHF and EURUSD with the SNB ever watchful. EURUSD duly held 1.1240 yesterday where I noted large option expiries and has been down to look at the 1.1175-80 bids/support but that inherent dip demand kicked in again but rallies have been limited with decent option expiry interest today at 1.1200 in play.
AUDUSD fell to 0.6777 helped by AUDJPY supply but has since rallied on more optimistic tones from the RBA. Gold price still helping too but AUD rally sellers remain poised. USDCAD remains tightly bound having fallen from highs around 1.3310 but running into support at 1.3215 so far helped by some CADJPY supply.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
Don't forget I offer 1-2-1 mentoring if there's areas of trading this latest volatility that you might need so further help with.
Back to the hallowed Hall tomorrow for the mighty Shrimpers' first home game of the season and we'll be there with high hopes and optimism as ever despite last week's dismal display. Bring it on !
Have a good day/weekend out there one and all.
Interbank Rate 09.37 BST