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US Dollar demand again but jury still out

Tuesday 31 March 2020

A flash crash at the Japanese fixing saw some large USD demand sending GBP and AUD sharply lower. Sources tell me to expect more USD demand into/at London's 4PM fix with particular impact versus GBP, AUD, CAD, and NOK.


Elsewhere risk sentiment is mixed as Tuesday arrives after some positive Chinese PMI, if you believe it given that  other reports show that "Based on cremation figures, Wuhan residents estimate more than 40,000 have died, compared with an official toll of 2,535". That number would tie in with a Chinese website that was printing up the alleged real figs at the time but taken down by govt every day. I leave you to be tne judge but we should remain concerned as to further COVID fallout both here and globally.


GBPUSD capped at 1.2440 yesterday with the level surviving a London 4pm fix rally from 1.2375 but stayed in tight range until that flash crash down to 1.2242 in Asia, proving once again how fickle these markets are. EURGBP fell to 0.8875 (GBPEUR upto 1.12620) on the strong GBP demand. Not sure now about any month-end demand left so let's see what the market wants to do with it. GBPJPY found support around 133.00 yesterday and on the GBP flash dump so that's our line in the sand now but since holding 134.20 on the rebound. .


I stay poised to sell GBP rallies and buy back in the dips as ever. Obviously still seems to be some natural demand which I respect of course but the overall picture remains less clear still imho. Today's London fix will be very interesting.Patience is a virtue and entry level key as always.


USDJPY has risen to 108.73 amid the USD demand and some risk-on sentiment but finding sellers again while EURJPY has found a base again at 118.80 but rallies limited to 119.75 amid the mixed risk and USD sentiment.EURUSD capped into 1.1100 and now tested 1.0980 support on the retreat/USD demand .USDCHF based at 0.9560 and currently back up to 0.9640 helped by some EURCHF dip demand at 1.0570 which seems a decent line in the sand. SNB in the frame again imho.


AUDUSD had looked underpinned like GBP but also crashed in that Japanese fix from 0.6214 to 0.6075 before finding dip demand again. USDCAD has found a base now at 1.4120 amid softer oil still and rallied to 1.4200 amid the general USD demand.


Fickle Forex markets ever prevailing so be ready to jump on moves with your entry/exit levels and orders as always. Caution advised as ever if you're not sure.


Lots going on right now, and the foreseeable future, so don't forget that I offer 1-2-1 mentoring 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 as ever. Staying safe must be our main priority still.


Interbank rates: 08.50 BST

GBPUSD   1.2336

EURUSD   1.0990

EURGBP   0.8912

GBPEUR   1.1222

GBPAUD   2.0010

GBPCAD   1.7500

GBPJPY   133.63

GBPZAR   22.1425

GBPHKD   9.5641

USDJPY   108.27

USDZAR   17.9455

EURJPY   119.08

EURCHF   1.0593

EURHKD   8.5222

AUDUSD   0.6167

USDCAD   1.4182

USDCHF   0.9632


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