Up and down and round and round we go
Friday 17 April 2020
I said earlier in the week, here and in various tweets, that I expected to see good two-way business given that we had some re-balancing going on and some option expiry containment and so it's proved with FX pairs in tight-ish range but providing great jobbing opportunity.
Lots of unknowns out there still and risk sentiment remains fragile despite some upbeat reports on COVID-19 vaccine progress. Awful US data but Trump still bleating on about re-opening the economy has provided some USD support. In any case we had rubbish data out of China too and we'll get it from everyone in the days/months ahead. Either way, recent price moves show that many of the usual correlations have not been so obviously playing out with individual currencies tending to do their own thing.
GBPUSD yesterday fell through the strong support at 1.2430 but failed at the next line at 1.2400 and we've been back up to test the 1.2520-30 pivot area I've been highlighting and I hope my Tweets once again gave you a good steer along with my morning update and levels to watch. EURGBP duly held 0.8700 (GBPEUR 1.1494) on some large option expiry interest and rallied only to fall back to test 0.8680 (1.1520) as the Euro found sellers again generally after EURUSD capped its own rally at 1.0880. Even larger expiries at 0.8700 on Monday and I expect that to contain but also help cap Cable still. GBPJPY found support around 133.80 again but also capped at 135.00 again since so greaT 2-way pips as the jury remains out on the next decent move/direction.
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. Equal argument still for buying dips though atm too as I expect to see some decent two-way business for the moment still.
USDJPY found support around 107.20 but since rallied before capping around 108.00 again.EURJPY fell again to look at 116.50 but now capping into 117.50 again on the uncertain outlook still. EURUSD yesterday fell through the decent 1.0850 and 1.0830 support but held 1.0820 only to fail back into 1.0880. Large expiries today at 1.0800, 1.0835 and 1.0850 in play.USDCHF based around 0.9650 as EURUSD fell yesterday and again at 0.9675 in Asia for the same reason but has capped into 0.9730 as sellers remain poised with EURCHF still struggling to make gains and now falling through 1.0520 to test the next line at 1.0500.The SNB still lurking but unable to stem the time atm.
AUDUSD fell again to test those 0.6275-80 bids again but since rallied to 0.6385 before retreating again this morning on some general USD demand and soggy risk. USDCAD has been up to look at 1.4180 as oil retreated further and amid latest BOC report saying they would have cut rates anyway but sellers prevailing up there and since all the way back down to look at 1.4000.
Let's continue to be careful out there in all things as ever. Staying safe must be our main priority still.
Interbank rates: 08.30 BST