US Dollar falls as Democrats take the House
Wednesday 7 November 2018
Yesterday's US mid-term elections have seen the Democrats take the House of Representatives in a move that undermines the Trump grasp but his Republicans have increased their majority in the Senate. We've seen some US$ selling on the initial outcome impact but the jury remains out on what it will all mean in due course. Meanwhile Brexit border issues continue to also grab headlines and the Pound continues to feel some love overall.
The GBPUSD dip demand I've been highlighting meant that we saw a hold of the 1.3020-30 support area yesterday on some Brexit wobbles and risk-off GBPJPY selling.Although 1.3100 continued to provide good resistance the US election results have seen it break and test the next decent line at 1.3150 where yesterday I again mentioned that offers lay in wait.Sell interest around 1.3150 being tested again as I type then there's more at 1.3180, 1.3200,1.3230 and 1.3250.Immediate demand now around 1.3120 then larger at 1.3100 and 1.3080 then 1.3050, 1.3030 and 1.3000. I remain GBP bearish overall and happy to jump on rallies then buy back in the dips but still not looking for too much of a retracement at the moment if this latest wave of US$ supply continues.
EURGBP has fallen further to post 0.8711 (GBPEUR up to 1.1480) as GBP buyers generally prevail. More buyers into 0.8700 and 0.8675-80 still with sellers now poised again around 0.8750, 0.8780-85 and 0.8800
EURUSD has held around 1.1400 and now broken up through the decent resistance between 1.1430-50 to post highs of 1.1475. Large option contract interest rolling off today at 1.1500 expected to provide some decent sell interest given recent range but don't rule out a decent challenge especially if the US$ supply continues today. Some immediate bids/support at 1.1450 with larger interest at 1.1420-30, 1.1400 and 1.1380. Sellers into 1.1480 still then 1.1500, 1.1520 and 1.1550.
USDJPY remains underpinned around 113.00 and rallied to 113.82 helped by some risk-on Yen selling before falling back to test 113.00 again on the post-election US$ supply.Immediate sell interest now around 113.30 with larger interest at 113.50 again then between 113.80-00 still.Bids/demand around 113.00 still then 112.80 and 112.50. I remain a rally seller buying back in the dips.
USDCHF has also retreated from 1.0051 highs and currently back below 0.9990 as I type with EURCHF tightly bound and EURUSD demand prevailing. EURCHF bids/support at 1.1450 holding for the moment then more at 1.1430 and 1.1400 with sellers poised at 1.1480-00 still. USDCHF bids at 0.9975-80 still then 0.9960 with sellers now poised at 1.0020 then 1.0060 and 1.0080-1.0100 still. Still happy to trade both sides of the price action at the moment but preferring the dip buys.
AUDUSD has now broken up through decent lines at 0.7250 to test 0.7280 on the US$ selling and helped by some strong NZD demand on good NZ jobs data.Immediate bids/support now at 0.7250 then 0.7230, 0.7200 and 0.7180 again with sellers poised around here at 0.7280 then larger into 0.7300 then 0.7320. USDCAD has fallen back to test 1.3100 after failing above 1.3150 amid the general US$ supply.Bids still at 1.3100 but being severely tested as I type then more at 1.3080 and 1.3050 again with sellers poised between 1.3120-30 and 1.3160 still.
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 07.50 GMT
GBPUSD 1.3127
EURUSD 1.1450
EURGBP 0.8722
GBPEUR 1.1465
USDJPY 113.06
USDCAD 1.3125
USDCHF 1.0004
GBPAUD 1.8103
GBPCAD 1.7231
GBPCHF 1.3136
GBPHKD 10.1774
EURHKD 8.8769