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  • Mike Paterson

Softer risk tones return

Wednesday 6 October 2021

Weaker risk sentiment prevailing this morning with equities and yields falling and we've seen mixed USD tones as JPY and CHF demand return capping cross and core pairs. Oil and gas prices off their highs too.


RBNZ duly raised interest rates as expected by 0.25% so despite an initial algo-led spike we're now back down to 0.6887 amid the general risk-off plays and NZDJPY selling in particular.


Amid all this general market uncertainty I will repeat that patience and discipline in trading are key, as ever, and not being greedy. Ignore the noise and countless amount of "analysts" trying to explain the reasons for moves. Just focus on the price action and decide what presents value or doesn't.


GBPUSD: Another good rally yesterday but failing at 1.3650 yet again and re-sells duly placed again on the rise. Good support at 1.3580 now broken to post 1.3559 amid the softer risk tones/GBPJPY selling and pips duly banked per my earlier tweet/s. I remain a rally seller but respecting some ongoing dip demand while keeping an eye on EURGBP and GBPJPY as always. EURGBP: 0.8515-20 support broken but the larger interest at 0.8500 still holding albeit with limited rallies thus far as EURUSD retreats along with GBPUSD. GBPJPY: Failure above 152.00 amid the softer risk tones generally and now 151.50 broken on the way back down this morning. Still good two-way pips expected in these ever-fickle-risk times.


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: 1.1580-85 now broken and testing 1.1550 after failing around 1.1600. The pair still finds itself in the middle of cross-flow action and variable risk plays. USDJPY: Yesterday's rally continued but capping at 111.80 now as JPY demand returns. EURJPY: 129.50 capping again but 128.80 remains a good line of support as we continue to range. USDCHF: 0.9260 support now notable after the hold of 0.9240 as EURUSD retreats again and as EURCHF holds 1.0740 with the SNB ever vigilant. EURCHF: Some CHF demand notable still but 1.0730-40 being supported with SNB shadow ever present on this and USDCHF.


AUDUSD: Another failure at 0.7300 and retreating back to 0.7330 as I type amid the firmer USD/softer risk tones. USDCAD: 1.2550 continued to provde support, where we also have large option interest today and back testing 1.2650 amid the firmer USD/softer oil tones before failing. More option interest today.


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


Interbank rates: 08.35 BST

GBPUSD 1.3582

EURUSD 1.1575

EURGBP 0.8523

GBPEUR 1.1730

GBPJPY 151.46

GBPCAD 1.7145

GBPZAR 20.5340

GBPHKD 10.5788

USDJPY 111.62

EURJPY 129.11

EURCHF 1.0753

EURHKD 9.0187

AUDUSD 0.7237

USDCAD 1.2635

USDCHF 0.9295


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