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  • Writer's pictureMike Paterson

Someone's pressed the pause button again

Wednesday 22 January 2020

Trump arrogantly/ignorantly dismisses climate change at Davos as his own impeachment trial gets underway, markets try and evaluate the threat of coronavirus still and the Pound runs into BOE rate-cut doubters again. Risk sentiment overall continues to be flaky and rightly so.

GBPUSD duly held 1.3080 yesterday after the wages/jobs data-led rally which gave more credence to doubts of a rate cut from the BOE next week (something I've warned of previously too) but sellers have re-appeared and good two-way business prevails.EURGBP has fallen through 0.8500 as core pairs diverge but holding support at 0.8480-85 at the moment (GBPEUR sellers 1.1790-00).GBPJPY has found a base around 143.00 now with USDJPY holding 109.80 but rallies tempered by core pairs finding rally sellers and the general risk-off sentiment.

I stay poised to sell GBP rallies overall and buy back in the dips as ever but continue to see some good two-way business as we continue in these tight ranges.

EURUSD has remained tightly bound between 1.1070-00 as cross-play interest provides both sellers and buyers but still on the back foot. USDJPY capped at 110.10 and has fallen to test the good line at 109.80 again helped by the risk-adverse plays. EURJPY remains tightly bound with the JPY demand and EURUSD failing to rally too far.

USDCHF still finding support in the dips with the SNB never far away and some general USD demand prevailing and now back up through 0.9700 with EURCHF also underpinned again.

AUDUSD has now broken down through the good demand at 0.6835 helped by some AUDJPY supply amid the Chinese/regional coronavirus concerns but still finding some dip demand all the way down as we wait on more data tonight.  USDCAD is still tightly bound but now rising a little further to test 1.3100 elped by a further oil price fall and CADJPY supply. BOC interest rate and policy decision today at 15.00 GMT after the latest CPI data at 13.30 GMT. Expectations are for no rate cut but the jury firmly out on whether we see more hawkish or dovish tones.

Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

Have a good day out there one and all.

Interbank rates: 08.40 GMT

GBPUSD   1.3045

EURUSD   1.1078

EURGBP   0.8536

GBPEUR   1.1773

GBPAUD   1.9081

GBPCAD   1.7059

GBPJPY   143.43

GBPZAR   18.8696

GBPHKD   10.1138

USDJPY   109.95

USDZAR   14.4536

EURJPY   121.82

EURCHF   1.0766

EURHKD   8.5905

AUDUSD   0.6837

USDCAD   1.3076

USDCHF   0.9718

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