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  • Mike Paterson

US Dollar retreats again but still ranging

Tuesday 25 May 2021

Risk sentiment has improved a little but remains fragile and we've seen some renewed pressure on the Greenback but with FX pairs still moving slowly and within recent ranges.

Citibank's End of month USD flow signals point to a small net buy interest but with US and UK on holiday on 31st May we will anticipate a lot of the required flow to be conducted into Friday even though there will be a 4pm London fix on Monday. Month-end Spot value therefore will be traded tomorrow. Recent signals/forecasts have not been too accurate to say the least so take the info with due caution but forewarned always forearmed.

Jury on the Greenback still out so ignore the noise and, as always in these fickle times, be careful with your trading. Pick your preferred entry/exit levels and don't be greedy or over-analyze. Patience and discipline are key too of course,as highglighted perfectly by those post-FOMC moves yesterday.

GBPUSD: Sellers prevailing above 1.4200 again falling back to 1.4170 as I type as some USD demand returns.

EURGBP: Now holding 0.8600 again with large option interest tomorrow helping to support but sellers remain poised between 50-60 again as I warned on twitter yesterday as we continue to range. Good two-way pips whatever your bias. Dip demand helping to cap GBPUSD still.GBPJPY: Underpinned at 153.80 still but sell interest at 154.30-50 also amid the variable risk sentiment.

I remain a GBP rally seller across the pairs but still not getting over greedy with expectation on the retreats.

EURUSD: A good hold of 1.2180-00 this time amid the general EUR demand and some decent option Put interest still but sellers poised around 1.2260 as we continue to range. I prefer to sell rallies overall still but respecting ongoing dip demand.USDJPY: Still holding 108.60 and on the rise as I type amid some general USD demand returning.EURJPY: 132.80 now a decent base but sellers at 133.50 still poised.USDCHF: 0.8960-65 has given way as EUR rallies again but now holding 0.8930 as EURUSD caps and with SNB ever vigilant/helpful. EURCHF: Capped into 1.0980 still as USDCHF fell but some general EUR dip demand and SNB shadow keeping it underpinned.

AUDUSD: A good hold of 0.7715-20 amid those large option Puts interest I warned about here and on twitter yesterday. Another cap into 0.7780 now. USDCAD: Holding 1.2030 again after capping at 1.2080 with CADJPY impact still in play both side of the price along with fluctuating oil price and USD sentiment ofc.

Let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates: 08.27 BST

GBPUSD 1.4204

EURUSD 1.2259

EURGBP 0.8629

GBPEUR 1.1587

GBPAUD 1.8280

GBPCAD 1.7096

GBPJPY 154.28

GBPZAR 19.6248

GBPHKD 11.0093

USDJPY 108.60

USDZAR 13.8446

EURJPY 133.13

EURCHF 1.0962

EURHKD 9.5071

AUDUSD 0.7770

USDCAD 1.2035

USDCHF 0.8942

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