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  • Writer's pictureMike Paterson

Steady risk sentiment brings USD gains

Tuesday 7 July 2020

Chinese and US equity markets are still leading the way and giving FX pairs a firmer risk tone again generally but with some USD gains notable after yesterday's retreat. All ranging though and still very fragile out there though as COVID 19 resurgence fears remain a real threat with Melbourne now announcing a fresh 6 week lockdown.

GBPUSD finally broke above 1.2500 to test good resistance at 1.2520-30 helped by some GBPJPY demand before retreating and re-sells duly placed. Support coming in at 1.2465-70 again for the moment.

EURGBP remains underpinned and enjoyed a run higher to 0.9067 amid EURUSD breaking up through 1.1300 and now finding a base at 0.9030 again in the retreat. More support behind at .9000-10 again.GBPJPY has capped around 134.60 a few times but holding 134.00 on the retreat amid the variable risk sentiment overall.

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. I still expect to continue seeing some dip demand but cross-flows and Brexit will produce a mixed bag moving forward.

USDJPY remains tightly bound between 107.25-75 supported by the better risk sentiment/firmer USD tones but Yen buyers stay poised. EURJPY has found a fresh base at 121.30 but capped at 122.00 and retreated to from whence it came and making its mind up as I type.EURUSD finally broke up through 1.1300 on the firmer risk/softer USD combo ands triggered stops before capping at 1.1345 where yesterday we had large option expiries. No coincidence and we've since been back down to 1.1281 this morning as we continue to range trade with the impact of cross-flows and expiries clearly evident again. USDCHF retreated through 0.9400 to post 0.9385 yesterday as EURUSD rallied  but rallying to test 0.9430 now as I type on the firmer USD tones and with the SNB ever vigilant in the dips.

AUDUSD has had a little reality check on the Melbourne lockdown after failing at 0.7000 with the threat of Chinese economic retaliation still lurking but dip demand expected still with a few bids building now at 0.6930 and 0.6900-15.

USDCAD held 1.3525-30 and now posting above 1.3580 on its latest rally amid the variable oil/risk/firmer USD combos but still ranging overall in these ever fickle markets.

Lots going on right now, and the foreseeable future, so don't forget to contact me if there's areas of trading these volatile markets or how to make best use of the order boards and expiries, that you might need some further help with.

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

Interbank rates:  08.33 BST

GBPUSD   1.2478

EURUSD   1.1285

EURGBP   0.9047

GBPEUR   1.1055

GBPAUD   1.7976

GBPCAD   1.6942

GBPJPY   134.21

GBPZAR   21.3700

GBPHKD   9.6742

USDJPY   107.55

USDZAR   17.1283

EURJPY   121.38

EURCHF   1.0639

EURHKD   8.7510

AUDUSD   0.6941

USDCAD   1.3577

USDCHF   0.9427

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