UK election in focus
Monday 2 December 2019
First of all I wish to pay respect to the tragic events on London Bridge last Friday and once again we are reminded that we live in fragile times. It all puts chasing the ace in FX markets in proper context.
Only 10 days now to the UK General Election and the polls overall still show an uncertain outcome. Ever thus, and the various permutations will not be known until the votes are counted despite polls/conjecture. Elsewhere US-China trade talks continue to grab a few headlines also of an uncertain nature but risk sentiment for the moment seems happy that some sort of deal will be made eventually. Still some downside risk though imho.
GBPUSD has duly found sellers/resistance into 1.2950 yet again and retreated/gapped lower in Asia to test 1.2900 so the two-way business continues albeit in a tight range. EURGBP has held 0.8500 again after a retreat once the month-end BUBA demand was completed but equally can't get back above 0.8550 for the moment. GBPJPY remains tightly bound but underpinned above 141.00 still.
I will continue to rally-sell GBP as my preferred strategy overall too amid the ongoing Brexit/Election uncertainty but happy to buy back in the dips as ever. In essence the general uncertainty and can kicking continues and for me that's still Pound negative overall but I respect that others (and the algos) see it differently). Remember we're ranging still so don't get too greedy whatever your bias.
EURUSD remains on the back foot and tightly bound still surrounded by on going option expiry interest with EUR 1.4bln today between 1.0995-1.1005 and 1.5bln tomorrow at 1.1030 but helped a little this morning by some better PMI data. USDJPY remains underpinned but equally tightly bound with buyers at 109.30 and sellers 109.80.USDCHF remains underpinned too but rallies still tempered above 1.0000 by decent offers and some ongoing EURCHF supply above 1.1020 with the Euro on the back foot overall.
AUDUSD continues in its 0.6750-0.6800 range while USDCAD continues to trade tightly too underpinned by the general USD demand but failing above 1.3300 again.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
An excellent double ton from England's skipper offers a chance versus New Zealand in the 2nd Test but weather likely to interfere. We'll live in hope though.
Have a good day/week out there one and all.
Interbank rates: 08.40 GMT