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  • Writer's pictureMike Paterson

US Dollar making its mind up as markets wait on Fed

Wednesday 18 September 2019

We've seen some general USD supply,helped by yesterday's US repo action which has led many to believe that greater QE measures are coming today along with a rate cut of at least 25bps and possibly 50bps. I'm not so sure and markets seem to reflect that uncertainty too with the Greenback underpinned again as Europe gets underway.

Elsewhere we still have the Saudi oil headlines, Brexit and trade war concerns all in play and risk sentiment remains variable. The US Fed announcement at 18.00 GMT is certainly not the only game in town.

GBPUSD duly held above 1.2380 yesterday then finally broke up through 1.2430-50 triggering stops to test above 1.2500 again amid the general USD supply only to retreat again this morning helped by some more Brexit bs. EURGBP failed into 0.8900 yesterday but still holding 0.8845-50 so there's your range for the moment until broken. GBPJPY has also seen some good two-way action once again holding 134.00 to test 135.30.

I remain GBP bearish overall and will continue to rally-sell as my preferred strategy amid all the uncertainty/indecision including Brexit/political fallout but happy to buy back in the dips as always.Rinse and repeat.Still no reason to change my view any time soon. Some caution required atm ofc with some inherent dip demand and the algos ever-poised for news bombs. The UK Supreme Court today continues its deliberations on the legality of Johnson suspending Parliament and whether he misled the Queen. Verdict expected tomorrow. Meanwhile we have UK inflation data risk at 08.30 GMT today. Stop Press: Softer data sees GBP a little lower as I type.

EURUSD found some good demand amid the USD selling yesterday and staged a solid recovery to post 1.1076 before retreating this morning. USDJPY duly held 108.00 but failed around 108.30 again amid the general USD selling but tempered by some Yen risk-on supply too. USDCHF has also moved back up to post 0.9954 with some help again from EURCHF demand.

AUDUSD popped up to 0.6870 on the USD supply only to retreat and remains on the back foot amid expectations of more cutting action from the RBA.USDCAD was caught between the softer oil/USD combo and been ranging tightly with good two-way pips to be had still.

Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

Have a good day out there one and all.

Interbank Rate 08.30 BST

GBPUSD   1.2471

EURGBP   0.8861

EURUSD   1.1058

GBPEUR   1.1283

GBPAUD   1.8243

GBPCAD   1.6543

GBPJPY   134.99

GBPZAR   18.2327

GBPHKD   9.6684

USDJPY   108.20

USDZAR   14.6306

EURJPY   119.62

EURCHF   1.0998

EURHKD   8.5694

AUDUSD   0.6837

USDCAD   1.3260

USDCHF   0.9948

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