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US$ demand again amid all the Brexit noise

Thursday 18 October 2018

The UK and EU agree to disagree and talk about extending the extension period but we're really no wiser after the highly touted summit in Brussels and it's the Greenback grabbing attention after slightly hawkish FOMC Minutes and Trump vowing to cut the budget deficit.

GBPUSD traded down to 1.3100 helped by softer UK inflation data then lack of positives from Brussels. We bounced back but failed into 1.3150 and now we've seen a test of the good support/demand around 1.3080 I mentioned yesterday before bouncing as European trading gets underway. Sell interest now poised again between 1.3120-30 then larger at 1.3150 still with more at 1.3180 and 1.3200.Immediate demand still around 1.3080 then good support at 1.3050, 1.3030 and 1.3000 still. I remain a GBP rally seller for the moment whilst respecting the dip demand so not getting too ambitious for the moment but the strategy continues to work well though. UK retail sales the data interest at 08.30 GMT

EURGBP had a look above 0.8800 (GBPEUR down to 1.1350) but has fallen back to 0.8764 (GBPEUR up to 1.1411) as Euro selling prevailed and GBPUSD found that dip demand. Sellers poised now around 0.8800 again then 0.8830 and 0.8850. Bids/support between 0.8750-60 again then 0.8730 and 0.8700.

EURUSD has broken down through the decent support around 1.1550 and fallen to test more support at 1.1500 and 1.1480-85 that I also mentioned yesterday before also feeling a bit of love this morning. Large option contracts rolling off today at 1.1450, 1.1500 and 1.1550 will help contain the range.Decent bids/support still around 1.1480-85 then 1.1450-60, 1.1430 and 1.1400 with sellers now poised at 1.1530, 1.1550, then 1.1580 and 1.1600 still.

USDJPY tested the 112.00 support yesterday but held well and took advantage of the USD demand to break up through the 112.50 cap and test the next line at 112.80 before retreating on this morning's USD selling. Bids/demand now around 112.30 then 112.0 and 111.85 still with sell interest into 112.80 and 113.00 still. I remain a rally seller for the moment. USDCHF has also found buyers in the dips again to test 0.9960 helped by ongoing EURCHF demand and the general US$ buying with the SNB never too far away either. EURCHF demand now around 1.1420 and 1.1380-1.1400 again with sellers at 1.1460 then between 1.1480-1.1500 still. USDCHF bids now at 0.9920, 0.9900 then 0.9880 then 0.9860 still with sell interest around 0.9960 again then 0.9980-00. I remain a dip buyer on both.

AUDUSD still remains tightly bound between 0.7100-50 with the large option contract expiries yesterday keeping it pinned around 0.7120 before falling to test 0.7100. Immediate demand still at 0.7100, 0.7080 then 0.7045-50 with sellers poised around 0.7150 still then 0.7180 and 0.7200. USDCAD has been up to 1.3056 on the US$ buying after rallying back through 1.3000. Immediate sell interest now at 1.3060-65 then 1.3080 and 1.3100 with buyers between 1.3000, 1.2980 and 1.2960.

Fickle Forex markets ever prevailing so get your orders in to take full advantage of these moves.

Have a good day out there one and all.

Twitter: @MSPFX and @MikePatersonFX

Interbank Rate 08.35 BST

GBPUSD 1.3104

EURUSD 1.1503

EURGBP 0.8777

GBPEUR 1.1393

USDJPY 112.63

USDCAD 1.3040

USDCHF 0.9946

GBPAUD 1.8392

GBPCAD 1.7091

GBPCHF 1.3034

GBPZAR 18.6634

GBPHKD 10.1595

EURHKD 8.9174

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