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  • Writer's pictureMike Paterson

US Dollar underpinned as FOMC hikes rates

Thursday 27 September 2018

Yesterday evening the US Federal Reserve FOMC duly delivered a 0.25% interest rate hike but the jury's out on the tone of the rhetoric. Part hawkish, part dovish and anyway there's the other concerns still surrounding trade wars,Brexit et all which all remain firmly in the mix.

GBPUSD held resistance around 1.3200 and has fallen to look at 1.3100 amid general USD demand. BOE's Carney and Haldane both up to the mic today so let's see if they have anything interesting/different to say.Sellers immediately around the pivotal 1.3130 area with more at 1.3150, 1.3180,1.3200 and 1.3220 again. Topside line in the sand still between 1.3280-1.3300 with a barrier option in place now at the upper end. Immediate demand now at 1.3100 then 1.3080 and larger into the key 1.3050 support line. I remain a GBP rally seller.

EURGBP failed at 0.8950 where I highlighted sell interest yesterday and has dipped below 0.8930 again to look at the 0.8900 support area (GBPEUR resistance 1.1235) amid general Euro supply helped by the ongoing budget/political problems in Italy. Sellers now poised around 0.8935 then 0.8950 still, 0.8965, with the larger interest at 0.8980 and 0.9000 still  I remain a dip buyer with the clock ticking on month-end Bundesbank demand but the lack of rally is notable.

EURUSD has fallen further to break down through the 1.1720 support to post 1.1685 amid the general US$ demand and Euro supply.Immediate bids now at 1.1680 then larger at 1.1660, 1.1630 and 1.1600. Note should also be made though of large option expiry interest today at 1.1700. Sellers poised around 1.1720-30 then 1.1750 where large option interest also lurks, 1.1780 and 1.1800.

USDJPY is still making its mind up but has failed at 113.00 again and retreated to test 112.50.Sell interest around 112.80 then 113.00 again with more at 113.20 ahead of barrier option defence at 113.50 and 114.00. Bids at 112.50, 112.30 and 112.00 still. USDCHF is also treading water again post-FOMC but still underpinned helped by EURCHF support now above 1.1300. Bids now at 0.9660, 0.9630, 0.9600 and 0.9575-80 with sell interest still into 0.9700 and 0.9730. EURCHF has bids again at 1.1320, 1.1300 and 1.1280 with sellers between 1.1380-1.1400 still.

AUDUSD has failed around 0.7300 again and fallen back to test support around 0.7220 one more and remains on the back foot. Sellers now around 0.7250 then 0.7280 again and 0.7300 with immediate demand building at 0.7220 and 0.7200 still. USDCAD rallied strongly on NAFTA disagreements and a seemingly increasing spat between Trump and Trudeau.Sellers now around 1.13060 then 1.3080-1.3100 with buyers initially now at 1.3020, 1.3000 and the pivotal 1.2980.

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.

Interbank Rate 08.45 BST GBPUSD   1.3115 EURUSD   1.1701 EURGBP   0.8922 GBPEUR   1.1206 USDJPY   112.58 USDCAD   1.3051 USDCHF   0.9687 GBPAUD   1.8148 GBPCAD   1.7113 GBPCHF   1.2702 GBPZAR   18.5470 GBPHKD   10.1680 EURHKD   9.0737

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