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  • Mike Paterson

US Dollar remains underpinned

Wednesday 15 August 2018

I said yesterday that the jury remains out and in essence it still does with Turkey and trade wars still at the core of it and we've seen some further USD demand amid the general fragility.

GBPUSD had a small rally to test the sell interest around 1.2820 that I mentioned yesterday as a better then expected headline UK labour wages/jobs report gave the algos something to feed off. Record levels of those "economically inactive" though and renewed Brexit uncertainty added to a general risk-off session and USD buying and we were soon testing 1.2750 and ultimately 1.2700 again to post 2018 lows of 1.2690.

Immediate support/buying interest now around 1.2700 again then larger into 1.2680 and 1.2650.Sellers poised around 1.2730 then 1.2750 with larger between 1.2780-00 and 1.2830. Still ranging though so keep selling the rallies but continue to be aware of dip demand given the extensive recent falls. UK inflation data today at 09.30 BST to keep an eye on but the BOE has other issues on its agenda too.

EURGBP fell to test 0.8900 support (GBPEUR resistance 1.1235) post-data only to rally as the Pound came under renewed pressure but has failed to hold above 0.8930 with Euro selling also still evident. Sellers still poised around 0.8950 then larger between 0.8980-0.9000. Some buyers back in around 0.8900 then larger between 0.8870-80 and 0.8850 still.

EURUSD has found a few sellers again as the risk-off sentiment returns and has fallen to 1.1317 amid general Euro weakness . Sellers now between 1.1350-60 then more into 1.1400 Large option contract interest at the now pivotal 1.1500 should help cap further rallies.Buyers lined up around 1.1400 with larger interest now into 1.1380 and 1.1350.

USDJPY has felt some love again but safe-haven Yen demand never too far away and capping rallies.Sellers poised into 111.50 still and 111.80. USDCHF remains underpinned above 0.9900 with the SNB never too far away with EURCHF still under pressure but steadying below 1.1300 for the moment helped by the USDCHF support.I highlighted yesterday that EURCHF showed the Euro is not out of the woods yet and still remains a good barometer.

AUDUSD finally broke down through the option-related support at 0.7250 only to run into the next layer at 0.7200. Buyers still at 0.7200, 0.7180 and 0.7150. Immediate sell interest now into 0.7250 then 0.7280-0.7300 still.Gold has slipped a little further and remains on the back foot. USDCAD has failed to take advantage of the general USD demand and that's telling as to CAD strength overall. Sellers now into 1.3100 and 1.3130 with buyers poised around 1.3050 and 1.3030.

Fickle and volatile markets still prevailing so get your orders in to take full advantage of these moves.

Have a good day out there one and all.

Interbank Rate 08.40 BST GBPUSD   1.2727 EURUSD   1.1337 EURGBP   0.8909 GBPEUR   1.1225 USDJPY   111.33 USDCAD   1.3074 USDCHF   0.9968 GBPAUD   1.7607 GBPCAD   1.6636 GBPCHF   1.2683 GBPZAR   18.0609 GBPHKD   9.8672 EURHKD   8.7905


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