Softer risk tones return but jury still out

Thursday 18 November 2021

Mixed USD tones in the past 24 hours but we've seen some softer risk and yields tones as oil retreats to 6-week lows and equities have a little wobble of their own too albeit remaining underpinned still.

Fed's Wiliams and ECB's Lane both speaking today at 14.30 GMT after we get the latest US jobs info at 13.30 GMT. More Fed speakers and Lagarde talking tomorrow. Some decent size option interest in play today too.

It's still a case of "what next" as markets and traders continue to second-guess the central banks everywhere with this renewed fragile risk sentiment lurking amid rising COVID cases in Europe and political unease around Ukraine, Taiwan and elsewhere. Gold is ostill above but failing to extend any gains beyond 1870.

GBPUSD: Support coming in at 1.3450 now and some pips banked again but failing above 1.3500 for the moment as I type. The pair does remain underpinned by firmer GBPJPY and softer EURGBP overall. I remain a rally seller overall while keeping track of EURGBP and GBPJPY as always. EURGBP: We've seen another break of 0.8400 after capping at 0.8430 area but holding 0.8385 ( GBPEUR capping 1.1925)so far. Still dangerous to bottom-pick at the moment though amid the general EUR supply.Good size option interest down here today at 0.8400 in the mix too and probably helping to support the Euro. GBPJPY: Those sellers at 154.75-80 and now 154.50 still prevailing at the moment but equally finding support between 153.80-00 as core pairs find dip demand at 1.3480 and 114.00

I remain a GBP rally seller across the pairs overall as my preferred trading side albeit still against the grain currently so being patient as ever. These markets are ever-fickle so good/tight position management essential.

EURUSD: Support at 1.1300 back in place but equally sellers poised into 1.1350 amid the general EUR weakness. I still expect any bounce to be less than impressive amid rising COVID cases, dovish ECB,and cross-flow action.

USDJPY: Still finding 115.00 a step too far as I warned yesterday amid the large offers I've been highlighting and a good retracement on the softer USD tones/JPY demand double whammy but holding 114.00 so far. Some good-size option interest in play today and helping to prop up at 114.00. EURJPY: 129.00 now providing some support but with rally sellers still poised as I've been warning. USDCHF: Support coming in now at 0.9260 after 0.9280 broke amid the generally softer USD tones but with the SNB ever vigilant and aware that EURCHF is under pressure again. EURCHF: 1.0500 still holding the retreats and a bit of a line in the sand with the SNB ever vigilant but those sellers in the rallies still prevailing amid the EUR weakness. Beware a break of 1.0500 that might trigger stops.

AUDUSD: 0.7250 support now duly coming in helped by the softer USD tones not to mention some decent option interest today. USDCAD: 1.2580 now holding as the pair finds support from the renewed CADJPY selling as oil continues its retreat versus the generally softer USD tones.

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

Interbank rates: 08.38 GMT

GBPUSD 1.3491

EURUSD 1.1332

EURGBP 0.8400

GBPEUR 1.1904

GBPCAD 1.7010

GBPZAR 20.9357

GBPHKD 10.5165

GBPJPY 154.04

USDJPY 114.18

EURJPY 129.38

EURCHF 1.0516

EURHKD 8.8300

AUDUSD 0.7277

USDCAD 1.2614

USDCHF 0.9280