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  • Writer's pictureMike Paterson

Risk sentiment wobbles again on Saudi oil attack

Monday 16 September 2019

The week-end saw a drone attack on Saudi Arabia's largest oil processing facility removing 5% of world output at a stroke and oil prices jumped by 8$ to levels not seen since July. Risk-off plays greeted the FX market opening in Asia but we've seen some retracement since as the full implications unravel.

We can expect some fragile times ahead again this week with Brexit and US-China trade spats still very much in play too.

GBPUSD has continued its rally to post above 1.2500 a couple of times but tempered by some GBPJPY risk-off supply and large options rolling off today at 1.2500.Some further selling in early Europe which I've taken advantage of on the softer risk sentiment and reports that Johnson still very much embracing No-Deal Brexit. EURGBP has slipped down further to post 0.8846 (GBPEUR up to 1.1304) only to rally on the GBP retreat and now 0.8896 (1.1238).GBPJPY has also seen some good two-way action once again and posted 135.25 before retreating to test 134.00 on the better risk plays.

I remain GBP bearish overall and will continue to rally-sell as my preferred strategy amid all the uncertainty/indecision including Brexit/political fallout but happy to buy back in the dips as always.Rinse and repeat.Still no reason to change my view any time soon. Some caution required atm ofc with some inherent dip demand and the algos ever-poised for news bombs.

EURUSD failed above 1.1100 a few times on Friday and is currently testing decent support/bids between 1.1050-60 helped by some EURJPY and EURCHF supply. USDJPY had a gap down from 108.10 to look at 107.40 on the early Asia risk-off wobbles but climbing slowly back since.USDCHF also gapped down from 0.9900 to test 0.9860 bids/support but also now back up and posting 0.9903 as I type.

AUDUSD continues to find a few buyers into 0.6850 but has sellers still poised between 0.6885-0.6900.USDCAD gapped lower on the oil price spike to test 1.3200 from 1.3280 but has rallied again as prices settle to post 1.3260.

Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

The resurgent Shrimpers ( yeah,yeah I know !) earned their first point of the season (it should have been 3) and England's cricketers deservedly drew The Ashes series albeit with the Aussies already claiming the urn being the holders. Hey ho, Bring on 2021-22 !

Have a good day/week out there one and all.

Interbank Rate 08.45 BST

GBPUSD   1.2455

EURGBP   0.8887

EURUSD   1.1066

GBPEUR   1.1250

GBPAUD   1.8080

GBPNZD   1.9480

GBPCAD   1.6508

GBPJPY   134.33

GBPZAR   18.1998

GBPHKD   9.6564

USDJPY   107.88

USDZAR   14.6379

EURJPY   119.39

EURCHF   1.0956

EURHKD   8.5911

AUDUSD   0.6878

USDCAD   1.3257

USDCHF   0.9899

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