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  • Mike Paterson

US Dollar still soft but not the whole picture

Tuesday 14 April 2020

tange times out there still and yesterday some more risk-on sentiment as the OPEC+ oil production deal found support over the weekend with the US stepping in to placate Mexico. Oil has not exactly flown higher given much was factored in but prices remain underpinned. We've seen equity rallies amid slightly more positive outlook/hopes for re-opening of economies on easing of death tolls and better than expected data out of China. Gold has rallied sharply to levels of $1727 not seen since 2012.


Personally I don't get this feel-good factor but we know markets are fickle. I think we are a long way from any degree of normality but given the extent of the financial market and FX carnage at the outset it's understandable that some bargain hunting/relief rally is being seen. Darker and uncertain days ahead still imho but we know not to over analyze. Trade what's in front of you and right now it's a generally softer Greenback and better risk sentiment prevailing. Time will tell whether is's justified or premature optimism.


GBPUSD has now found support into 1.2480 and 1.2500 after breaking higher in thin liquidity in Asia and up through 1.2530 and 1.2550 yesterday to now post 1.2574 in a further rally this morning and remains underpinned amid the softer USD and some GBPJPY risk demand again.EURGBP has fallen further to test 0.8700 (GBPEUR up to 1.1517) as the Euro continues to find some general supply and helping to underpin GBPUSD.GBPJPY has based at 134.60 helped by the dip demand on core pairs after retreating from 135.75 but once again finding sellers around 135.30.


I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always.Right now I'm happy to watch and bide my time apart from a small dabble here and there. Equal argument still for buying dips though atm too as I've been warning.


USDJPY has fallen to test 107.50 on the general USD supply and I've duly taken some profit around 107.60 and will look to re-sell on rallies into 107.80-00.EURJPY has fallen to look at 117.30 on the softer EUR/firmer JPY double whammy but since rallied into 118.00 on the better risk sentiment/core pair dip demand. EURUSD has found dip demand around 1.0900 after failing above 1.0960 and has since failed at 1.0950 on the rebound.  USDCHF has dropped back below 0.9650 after capping above 0.9680 again as EURUSD rises with EURCHF tightly bound between 1.0540-70 with the SNB still supporting as today's Sight Deposit data confirms.


AUDUSD has rallied again to post 0.6433 with the softer USD/OPEC oil cut deal double whammy again and helped by some more AUDJPY demand with Gold rallying too. USDCAD was holding up rather well given the OPEC deal was almost agreed but then tumbled to post 1.3856 before bouncing quickly to 1.3900 and since been tightly bound.


 *******  1-2-1 Mentoring Session Price Special: ******** GBP 55 per hour from GBP 95 per hour for existing subscribers. Limited offer for 2 weeks beginning on Monday 13 April.


A special price as a gesture to subscribers in these strange times. You don't need me to tell you that there's lots going on right now, and the foreseeable future, so don't forget to take advantage of my 1-2-1 mentoring sessions if there's areas of trading these volatile markets or how to make best use of the order boards and expiries, that you might need some further help with.


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


Interbank rates: 07.55 BST

GBPUSD   1.2553

EURUSD   1.0925

EURGBP   0.8703

GBPEUR   1.1488

GBPAUD   1.9603

GBPCAD   1.7430

GBPJPY   135.23

USDJPY   107.69

EURJPY   117.68

EURCHF   1.0551

AUDUSD   0.6408

USDCAD   1.3863

USDCHF   0.9656


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