Some US Dollar demand returning as another crazy week begins
Monday 30 March 2020
Well, after spending most of the European day making its mind up we were left in no doubt on the Pound after the 16.00 GMT London fix which saw huge demand for the month/quarter end Spot date and a GBPUSD rally from 1.2240 to 1.2440 in just over two hours then on further to 1.2485 amid USD selling across the board. We had seen another pre-fix GBP move during last week but from lower (oversold) levels and balancing some short supply. Friday's move squeezed out more shorts, but sellers have returned helped further this morning by some risk-off supply and we should now see a more balanced playing field.Famous last words!
Elsewhere we've seen equity markets fall this morning with oil prices on 17 year lows ( I noted on Friday its distinct lack of rally) and some risk-off sentiment back in play. COVID-19 fallout speculation continues to dominate as does how the Central Banks and goverments globally try to limit the damage.
GBPUSD has capped at 1.2470 in Asia but also found support at 1.2320 this morning on the retreat.EURGBP duly fell to test 0.8900 (GBPEUR up to 1.1235) on the strong GBP demand but since rallied to 0.8989 (GBPEUR down to 1.1125) . We should still have some month-end demand to temper losses should GBP surge again. GBPJPY found support around 132.60 but failed at 134.80 on the GBP rally as USDJPY found renewed supply but since holding 132.80 on the retreat with core pairs both finding dip demand again.
I stay poised to sell GBP rallies and buy back in the dips as ever. Obviously seems to be some natural demand over the past few days which I respect of course but the overall picture remains less clear still imho.Patience is a virtue and entry level key as always.
USDJPY has fallen to 107.12 amid the USD supply and risk-off sentiment despite BOJ threatening to throw their own kitchen sink at the economy while EURJPY has had an up n down ride between 118.80-120.30 but now trading mid-way as core pairs trade more tightly.EURUSD has been up to 1.1147 amid the general USD supply but sellers prevailed there too and now tested 1.1060 support on the retreat.USDCHF capped around 0.9650 as EURUSD rallied but losses below 0.9520 tempered buy some EURCHF dip demand again with that pair now finding support around 1.0580.
AUDUSD rallied strongly too on the USD Friday fix supply and we've been up to 0.6185 before retreating to 0.6112 helped by some renewed AUDJPY selling.USDCAD has fallen from 1.4140 to test 1.3925 but since rallied on further oil price falls and some USD supply to look at 1.4100.
Fickle Forex markets ever prevailing so be ready to jump on moves with your entry/exit levels and orders as always. Caution advised as ever if you're not sure. Please feel free to contact me as always.
Let's continue to be careful out there in all things as ever. Staying safe must be our main priority still.
Interbank rates: 07.50 GMT