Some risk appetite returns but markets guessing still
Thursday 8 April 2020
Boris Johnson has spent another night in ICU but condition still "stable" and the Pound remains tightly bound for the moment but underpinned as some risk-on sentiment returns amid firmer equity and oil markets.
The highly anticipated Eurogroup meeting resumes today at 17.00 CET. The uncertainty continues to put a cap on the Euro and we've seen another retreat but EUR pairs still generally finding some dip demand. Also on the slate today is the OPEC+ meeting around 16.00 GMT where we should get some more idea on potential production cuts.
All in the mix still then as we head into the Easter long week-end and we can expect some position squaring once we know more from those two meetings. Caution as ever is advised.
GBPUSD has now found support into 1.2360 after breaking up through that resistance yesterday and posting fresh recent highs of 1.2430. Mostly underpinned since helped by some risk-on GBPJPY supply and shrugging off some widely expected poor GDP and production data earlier.Also still finding some support from the further EURGBP retreat into 0.8750 after breaking down through 0.8800 on the general EUR softness yesterday. EURGBP has found support around 0.8750 but rallies limited since while GBPJPY has based at 133.80 helped by the better risk sentiment and dip demand on core pairs but since finding sellers into 135.50.
I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. Equal argument for buying dips though atm if that's your preferred side.
USDJPY has capped above 109.00 again but finding dip demand around 108.80 on the better risk plays with large option expiries at 108.40 and 108.95-109.00 in play and should also help contain amid the the variable risk sentiment. EURJPY has based around 118.00 after the latest retreat but since rallied to test 118.60 on the better risk and EURUSD dip demand. EURUSD capped around 1.0900 and since retreated below 1.0850 but found buyers/profit-takers as traders remain cautious ahead of today's Eurogroup meeting. USDCHF has based below 0.9700 but since capped above 0.9730 as EURUSD rises and remains tightly bound around 1.0550 with the SNB still in the frame.
AUDUSD rallied again only to fail around 0.6250 but since holding around 0.6200 helped by some renewed AUDJPY demand. USDCAD found support below 1.4000 again but since failing into the pivotal 1.4080 area I highlighted yesterday. Retreat since to 1.4010 on firmer oil prices but currently bouncing as I type as jury remains out ahead of today's OPEC+ meeting. Some SA Rand demand returning on the better risk sentiment generally but still remains fragile.
Fickle Forex markets ever prevailing so be ready to jump on moves with your orders as always. Caution advised as ever if you're not sure but do feel free to contact me.
Let's continue to be careful out there in all things as ever. Staying safe must be our main priority still.
Interbank rates: 08.15 BST