Softer Greenback and Brexit the main themes again
Tuesday 4 December 2018
More dovish talk from the US Federal Reserve and the on-going Brexit concerns have both been combining to produce some decent moves in the past 24 hours albeit still in recent ranges.
GBPUSD has been back down to test 1.2700 but this morning has been back up to 1.2842 after the ECJ Advocate General ruled that the UK could in theory reverse Article 50 but the issue still remains a little fuzzy to say the least with the ECJ final ruling still be issued. Yesterday's appearance in the Commons from Attorney General Geoffrey Cox regarding the legal advice that May & Co received over Brexit has now resulted in Speaker of the House Bercow agreeing to a contempt-of-parliament challenge. Meanwhile the Commons will debate May's "deal" every day this week ahead of next Tuesday's Meaningful Vote.
Immediate offers into 1.2850 still then 1.2880,1.2900 ,1.2920 and 1.2950 with bids/demand now into 1.2800, 1.2780, and 1.2750 then 12720 and 1.2700.I remain GBP bearish overall and happy to jump on rallies then buy back in the dips while remaining core short, a strategy that continues to work well.
EURGBP remains underpinned and has rallied again to post 0.8945 (GBPEUR down to 1.1180) before falling back to 0.8905 on this morning's GBP rally. Buy interest at 0.8900, 0.8880, 0.8850 with sellers now at 0.8925-30 then 0.8950 still.
EURUSD has rallied further to test the 1.1420 offers before capping with more behind that at 1.1450 again.Immediate demand/support now around 1.1380 then 1.1350.
USDJPY has fallen further to break down through 113.00 to post lows of 112.73 amid the softer US$ sentiment. Bids still building around 112.50 then 112.30 and 112.00 with sellers into 113.00 then 113.30 and 113.50. I remain a rally seller buying back in the dips with decent 2-way business to be had.
USDCHF has also fallen to test 0.9930 with EURCHF underpinned but capped still around 1.1350. Sellers remain poised on both though even if the SNB will still look to "smooth" the declines.Bids/support still at 1.1300 and 1.1280 with USDCHF demand building between 0.9920-30 then 0.9900 again. Sellers poised at 1.1350-60 still and 1.1380 with USDCHF supply at 0.9980 then 1.0000. I'm happy to trade both sides of the price action at the moment in these tight ranges.
AUDUSD remains underpinned around 0.7350 but similarly failing to clear 0.7400.Last night the RBA left interest rates on hold at 1.5% as expected.Decent bids now at 0.7350 then 0.7320 and 0.7300 still with sellers at 0.7400, 0.7420 and 0.7450. USDCAD has steadied a little after the recent fall. Buyers now building at 1.3150 then 1.3120 and 1.3100 with sellers poised at 1.3200, 1.3220 and 1.3250.
Fickle Forex markets ever prevailing so get your orders in to take full advantage of these moves.
Have a good week out there one and all.
Twitter: @MSPFX and @MikePatersonFX
Interbank Rate 09.15