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  • Writer's pictureMike Paterson

Some US Dollar demand returns but jury still out

Tuesday 26 January 2021

Risk and USD sentiment ever fickle but the Greenback has been finding a few buyers again but albeit nothing of real note and already we're seeing some correction in both Forex pairs and equitities. Soggy UK jobs data released earlier is no surprise and I continue to ignore data releases amid the COVID uncertainty suffice to say I'll continue to feed off the algo reaction.

As I keep highlighting we're still ranging tightly overall with the various uncertainties continuing and the jury remains out so keep playing what's in front of you and don't over analyze.

GBPUSD finally broke down through 1.3650 and 1.3620-25 support lines but found more demand into 1.3600 and now pushing back up to test 1.3650-60 again as I type. EURGBP held the 0.8870 (GBPEUR 1.1275) line I higlighted here and on Twitter yesterday but equally failing to hold above 0.8900 (GBPEUR below 1.1235) so far in the bounce.GBPJPY capped into 142.00 this time as GBP broke lower and risk sentiment softened but has based at 141.30 and now 141.65 on the part-correction this morning.

I still have a naturally bearish stance on GBP overall and remain poised to sell into rallies but respecting dip demand still with price action ever fickle. Equally a case still for going long in the dips though as we continue to range. Patience and not getting greedy remain key.

USDJPY found a base around 103.65 this time where I noted some bids yesterday as we continue to range tightly amid the fickle risk and USD sentiment. EURJPY found support at 125.70 but failed at 126.00 in tight trading.EURUSD continued its retreat and broke down through strong support around 1.2125 but ran into more at 1.2110 when those softer USD tones returned this morning. USDCHF held 0.8875-80 this time on the EURUSD retreat and with the SNB ever watchful but struggling to get back through 0.8900.

AUDUSD fell back through the pivotal 0.7720 area but has held 0.7670 on the retreat as risk turns a little firmer and the Greenback softens this morning and now testing 0.7700 again where we also have large option interest today.USDCAD found support around 1.2700 where we also had that option interest yesterday that I highlighted here.

As we look at trading opportunities to begin the year it's even more important not to over analyze but trade the price action with discipline and patience.

A must-win game for the mighty Shrimpers tonight at the hallowed Hall after our disappointing loss on Saturday. We'll keep believing....

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

Interbank rates: 08.30 GMT

GBPUSD 1.3630

EURUSD 1.2130

EURGBP 0.8900

GBPEUR 1.1235

GBPAUD 1.7731

GBPCAD 1.7387

GBPJPY 141.45

GBPZAR 20.8468

GBPHKD 10.5673

USDJPY 103.79

USDZAR 15.2725

EURJPY 125.90

EURCHF 1.0783

EURHKD 9.4057

AUDUSD 0.7688

USDCAD 1.2756

USDCHF 0.8889

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