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  • Writer's pictureMike Paterson

Some risk-off sentiment again but jury still out

Friday 17 July 2020

A mixture of some risk-off tones and general USD demand has been the theme since late European trading but it's still a very mixed/confused market out there.

Yesterday the ECB brought little to the party as expected but did pay a nod to the the EU Summit starting today as I suggested in my preview. Cautious tones on any Recovery Fund agreement still previling despite Lagarde's hopes/pressure as highligted by both Rutte and Merkel again already this morning. Brexit trade talks today as well as all the usual COVID, US-China concerns so it could be a lively end to the week.

GBPUSD initially duly held around 1.2520-25 yesterday and re-sells and eventually placed once 1.2625 sellers helped cap the rally with the EURGBP slide once again holding 0.9050 as per my later tweet.Rinse n repeat until ranges broken but strategy remains the same. EURGBP duly held around 0.9050 again and remains underpinned helping the latest GBPUSD retreat but still capping t 0.9100 for the moment. Eyes on the EU Summit now. GBPJPY failed above 135.00 yet again as the risk-on rally faded and since been down to test 134.30 as I type.

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, risk sentiment and Brexit will continue to see a mixed bag as we've been witnessing.

USDJPY failed at 107.40 this time round and now down to 107.17 amid the softer risk plays while

EURJPY has found support around 122.00 on its latest retreat from 122.50 where it failed once again yesterday amid the variable risk and upcoming EU Summmit. EURUSD failed around 1.1440 after a post-ECB/risk-on rally but since been supported at 1.1370-80 again  as we wait on the EU Summit. Eyes on EU Summit headlines today and tomorrow which could lead to a gap on Sunday night's Asian opening.

USDCHF failed around 0.9460 again but supported still into 0.9430 amid the tight EURUSD range and steady/underpinned EURCHF with the SNB ever vigilant in the dips. AUDUSD has failed above 0.7000 again but equally finding support into 0.6960. Good two-way business expected again.USDCAD continues to hold 1.3500 but equally cap into 1.3600 amid the variable risk/oil price/USD combo.

Markets are ever-fickle but good two-way pips to be had so don't forget to contact me if there's areas of trading these markets or how to make best use of the order boards and 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. Enjoy your week-end one and all.

Interbank rates:  08.45 BST

GBPUSD   1.2544

EURUSD   1.1385

EURGBP   0.9076

GBPEUR   1.1016

GBPAUD   1.7957

GBPCAD   1.7033

GBPJPY   134.36

GBPZAR   20.9678

GBPHKD   9.7254

USDJPY   107.13

USDZAR   16.6930

EURJPY   121.94

EURCHF   1.0760

EURHKD   8.8284

AUDUSD   0.6983

USDCAD   1.3582

USDCHF   0.9452

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