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  • Writer's pictureMike Paterson

Softer Greenback amid variable risk tones

Thursday 9 July 2020

COVID-19 continues to dominate the landscape understandably but as investors take a more optimistic view still it's the US Dollar that's been bearing the brunt of the latest action and lower across the board.

Markets ever fickle though so FX pairs still seeing some good two-way business.

GBPUSD tested 1.2500 yesterday morning but from there it was one-way traffic mnostly once we got back through 1.12560 and since tested 1.2650. EURGBP rallied back up through 0.9000 but failed at 0.9010 as the Pound's rally gathered pace and we've been back to test the 0.8960 support line again this morning and that latest retreat is helping to underpin GBPUSD again. Good demand at 0.8960 and 0.8925-30 still but a line forming on top at 0.9000.GBPJPY has enjoyed a further run up to 135.70 amid the generally firmer risk sentiment and GBP demand.

I stay poised to sell GBP rallies overall as my preferred side and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. I still expect to continue seeing some dip demand but cross-flows and Brexit will continue to see a mixed bag as we've been witnessing lately.

USDJPY has given up 107.30 to post 107.18 on the softer USD tones generally after pinning itself to 107.50 yesterday amid large option expiries. Yen selling helping to counter the retreat though.EURJPY once again found a base at 121.20 but capped at 122.00 with core pairs both finding rally sellers.

EURUSD enjoyed the better risk/softer USD tones to rally up through 1.1300 then 1.1320 (which looks a little pivotal now) but failed at 1.1371 amid large expiries today between 1.1360-80 that I warned about in a tweet yesterday and now down to 1.1325. USDCHF failed above 0.9420 this time around and testing 0.9360 this morning amid the general USD supply plus some EURCHF selling too. The SNB will be ever vigilant in the dips.

AUDUSD has had a look at 0.7000 again this morning amid the softer Greenback and re-sells duly placed but looking underpinned between 0.6950-70.USDCAD  failed into 1.3620 again and now testing 1.3500 amid the firmer oil/softer USD combo.

Lots going on right now, and the foreseeable future, so don't forget to contact me if there's areas of trading these volatile markets or how to make best use of the order boards and option expiries, that you might need some further help with.

I wish you good trading and let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates:  08.45 BST

GBPUSD   1.2634

EURUSD   1.1336

EURGBP   0.8975

GBPEUR   1.1143

GBPAUD   1.8077

GBPCAD   1.7056

GBPJPY   135.48

GBPZAR   21.2791

GBPHKD   9.7951

USDJPY   107.25

USDZAR   16.8486

EURJPY   121.61

EURCHF   1.0627

EURHKD   8.7904

AUDUSD   0.6991

USDCAD   1.3498

USDCHF   0.9372

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