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  • Writer's pictureMike Paterson

Soft risk tones continue

Friday 20 August 2021

It's been a week of wobbly risk appetite and market retreats in a number of areas as the world melts down and now we head into the weekend amid further falls in equities, oil and US treasury yields with demand for JPY and CHF notable again. The Chinese central bank left monetary policy on hold but with no hint of easing amid their current economic slowdown markets took fright again.

Patience and discipline in trading are key as ever and not being greedy.Still some good two-way pips to be had as the jury remains out so picking your moments and levels are more important than ever. These moves are now extended by recent range terms so some caution is required but the portents for further declines remain in place.

GBPUSD: The retreat continued once 1.3680 then 1.3650 support both gave way amid the GBPJPY selling and USD demand to post lows of 1.3613 so far. I remain a rally seller while keeping an eye on EURGBP and GBPJPY as always. EURGBP: Now supported around 0.8550 after yesterday's break higher and testing 0.8580-85 offers as the GBPUSD fall outstrips EURUSD again.GBPJPY: 150.00 demand now history as the risk-off tones cremain and the retreat continues to test 149.20 which makes my core pair shorts ever more valuable.

I remain a GBP rally seller across the pairs but being patient as ever. These are risk sentiment markets and ever fickle so good/tight position management essential.

EURUSD: Capped at 1.1700 and re-sells duly placed but finding support at 1.1665-75 still amid all yesterday's large option interest and cross flows making an impact as I've been warning. USDJPY: Capped into 109.80 after a good hold of 109.50 as we continue to range amid the USD demand vs JPY demand on the cross pairs.EURJPY: 128.40 providing resistance and testing 128.00 again in the latest retreat amid the softer risk tones.USDCHF: Another failure into 0.9200 and 0.9150, where we hve some option interest today, now providing a base with the SNB ever vigiliant and some general USD demand but sellers still poised with EURCHF on the back foot again.EURCHF: 1.0735 now capping and dropping back to test 1.0700 again as I type but with SNB shadow ever present.

AUDUSD: Finding a cap at 0.7180 then 0.7160 and a decent move lower to test 0.7100 now amid the risk-off AUDJPY selling and soft iron ore price. USDCAD: The strong rally continues and now finding a base at 1.2800 amid firmer USD tones and tumbling oil price with CADJPY selling in play still. Capping at 1.2920 for the moment but dip demand to continue in current scenario.

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

Interbank rates: 08.56 BST

GBPUSD 1.3698

EURUSD 1.1680

EURGBP 0.8531

GBPEUR 1.1716

GBPJPY 150.16

GBPCAD 1.7590

GBPZAR 20.8934

GBPHKD 10.6099

USDJPY 109.73

EURJPY 128.17

EURCHF 1.0707

EURHKD 9.0560

AUDUSD 0.7163

USDCAD 1.2745

USDCHF 0.9167

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