Risk-sentiment still undermined as we head into month-end
Monday 29 October 2018
There's been more equity market wobbles and we've seen some scrappy two-way business as markets try and second-guess going into month-end.
GBPUSD held the support lines around 1.12780 that I highlighted on Friday and has since been back up to 1.2842 only to run into sellers again with month-end EURGBP demand and GBPJPY/GBPCHF selling helping to cap the rally. Sellers now poised again around 1.2830 with more interest at 1.2850 and 1.2880 still then 1.2900, 1.2920 and 1.2950.Immediate demand at 1.2800 then larger around the key 1.2780 area, 1.2750-60, 1.2730 and 1.2700 where we haven't been since mid-August. I remain a GBP bear and rally seller with the strategy continuing to work well. Today's sees the UK Budget speech at 15.30 GMT but one that carries the usual lack of expectation, this time with the added proviso that all bets are off anyway should a no-deal Brexit come to pass.
EURGBP held 0.8860 (GBPEUR capped at 1.1285) and has rallied on the usual month-end Bundesbank demand/expectation but is finding 0.8900 (1.1235) a step too far for the moment. Sellers still poised there then 0.8920 and 0.8950.Immediate bids/support at 0.8875, then 0.8860 again and larger at 0.8830 and 0.8800. I shall continue to buy dips, until month-end at least.
EURUSD held 1.1330 but has since failed above 1.1400.Bids/support around 1.1350-60 again then larger at 1.1330 and 1.1300 where barrier option interest will provide decent support as I've been warning. Sellers poised now between 1.1400-10 then 1.1430 and 1.1450 still. News breaking as I type that Germany's Merkel will not stand for re-election as her party's leader is undermining the Euro now too although she is now reported as saying she wants to stay on as Chancellor. All will be revealed in due course I guess.
USDJPY had a wobble down to 111.38 in a rush on Friday as risk-off Yen demand prevailed again with US equities tumbling but has since been back up to 112.10. Large option contract interest rolling off tomorrow at 111.60 is expected to provide support on further dips again. Immediate sell interest at 112.10 still then 112.30 and 112.50. I remain a rally seller for the moment while respecting the 111.60-80 support now. USDCHF has remained underpinned above 0.9950 and posted highs of 1.0026 before retreating on some renewed Swiss Franc demand but with the EURCHF dip demand at 1.1350 still holding. More bids at 1.1330 and 1.1300 with sellers still at 1.1400, 1.1430 and 1.1450. USDCHF bids again now at 0.9980 and 0.9960 still then 0.9930 and 0.9900 with sellers still into 1.003 as I warned on Friday then 1.0050. Happy to still trade both sides of the price action at the moment.
AUDUSD has found a little support but still struggles to hold gains above 0.7100. Demand now at 0.7080 then 0.7050 and 0.7030 with sellers poised around 0.7120 and 0.7150 still. I remain a rally seller for the moment. USDCAD rallied further to 1.3158 after its post-BOC wobble down to 1.2980 but has since been back down to 1.3070.Sellers now into 1.3120 and 1.3160 then 1.3180-00 with buyers at 1.3080 and 1.3050.
Fickle Forex markets ever prevailing so get your orders in to take full advantage of these moves.
Saturday saw the mighty Shrimpers making the long journey north to Sunderland only to suffer a 3-0 defeat but everything was sadly overshadowed by the tragic events at Leicester City where 5 died in a helicopter crash including the much-loved/respected owner Vichai Srivaddhanaprabha. It appears now that the pilot Eric Swaffer, who also perished in the crash, saved the life of 100s as he wrestled with the ailing controls to avoid congested areas around the stadium. Our thoughts and condolences to all affected.
Interbank Rate 08.23 GMT GBPUSD 1.2828 EURUSD 1.1398 EURGBP 0.8884 GBPEUR 1.1254 USDJPY 111.95 USDCAD 1.3097 USDCHF 0.9985 GBPAUD 1.8060 GBPCAD 1.6800 GBPCHF 1.2808 GBPHKD 9.9455 EURHKD 8.8373