US Dollar demand back in play
Tuesday 30 October 2018
Equity markets have mostly steadied a little with Trump more upbeat on China trade deal and with month-end flows in play we've seen the Greenback in favour once more.
GBPUSD failed at 1.2850 yet again and has fallen back to post 1.2756 this morning with month-end EURGBP demand helping to cap the rally.Brexit concerns and an early UK election scenario (yesterday's Budget did seem designed to be somewhat of of a crowd pleaser) both playing out. Sellers now poised into 1.2800 then again around 1.2830 with the larger interest at 1.2850 and 1.2880 still then 1.2900.Immediate demand at 1.2750, 1.2730 with larger support still between 1.2680-1.2700. I remain a GBP bear and rally seller with the strategy continuing to work well.
EURGBP held 0.8860 and has rallied on the usual month-end Bundesbank demand/expectation (a reminder that the BUBA buy Euros for the UK's EU contributions) and now broken up through 0.8900 to post 0.8908 (GBPEUR down to (1.1235) a step too far for the moment. Sellers still poised at 0.8920 and 0.8950.Immediate bids/support now at 0.8880, then 0.8860 again and larger at 0.8830 and 0.8800. I shall continue to buy dips, until month-end at least.
EURUSD failed above 1.1400 yet again and has fallen back to 1.1358.Bids/support still around 1.1350-60 as I highlighted yesterday then larger at 1.1330 and 1.1300 where barrier option interest will provide decent support as I've also been warning. Sellers poised now into 1.1400 then 1.1420-30 and 1.1450 still. Germany's Merkel confirmed she will not stand for re-election as her party's leader but hopes to complete her term as Chancellor to 20121. That uncertainty is helping to undermine the Euro.
USDJPY has finally broken up through 112.50 sell interest/resistance and now testing larger interest between 112.80-113.00 Very large option contract interest rolling off tomorrow (Wednesday) at 111.60 is still expected to provide support on dips again along with talk of large month-end USD buying generally. Immediate sell interest at 113.00 still then 113.30 and 113.50. Immediate bids/demand at 112.50 then 112.30 and 112.00 I remain a rally seller for the moment while respecting the 111.60-80 support and that month-end buying still so buying back in the dips. USDCHF has also edged higher again to post 1.0033, taking out the initial 1.0030 sell interest in the process before retreating with the EURCHF failing above 1.1400 again. Bids now at 1.1380 then 1.1350, 1.1330 and 1.1300 still with sellers poised at 1.1430 and 1.1450. USDCHF bids again now at 0.9980 and 0.9960 still then 0.9930 and 0.9900 with sellers poised again around 1.0030 then 1.0050. Happy to still trade both sides of the price action at the moment but preferring the dip buys.
AUDUSD has found a little support at 0.7050 again but still struggles to hold gains above 0.7100. Demand still at 0.7050 and 0.7030 with sellers poised around 0.7100 again then 0.7120 and 0.7150 still. I remain a rally seller for the moment. USDCAD is still trying to make its mind up but notably not taking advantage of the general USD demand.Sellers now around 1.3130 then and 1.3150-60 and 1.3180-00 still with buyers at 1.3100, 1.3080 and 1.3050.
Fickle Forex markets ever prevailing so get your orders in to take full advantage of these moves.
Yesterday I felt was not the best time to congratulate Lewis Hamilton on his 5th F1 title given the tragic events unfolding at Leicester but it's been a remarkable season for the Englishman who really does seem to have his mojo back and fully deserves his success.
Have a good day out there one and all.
Interbank Rate 08.22 GMT GBPUSD 1.2767 EURUSD 1.1366 EURGBP 0.8901 GBPEUR 1.1233 USDJPY 112.85 USDCAD 1.3105 USDCHF 1.0029 GBPAUD 1.8011 GBPCAD 1.6738 GBPCHF 1.2812 GBPHKD 9.8983 EURHKD 8.8125