USD demand and perky Pound as we wait on MPC
Thursday 5 August 2021
Still seeing some variable risk sentiment but some hawkish comments by US Fed Vice Chairman Clarida yesterday and decent ISM data has put a bid under the Greenback as the focus remains on Jackson Hole and potential shift of position from Powell & Co but the FOMC voters are certainly not united at this time. Large options interest again today in play on EURUSD, USDJPY and USDCAD.
The Pound is finding some support in the dips again helped by the current GBPJPY demand and EURGBP supply with the latest BOE MPC decision looming at 12.00 BST. No great change expected from them but we never say never eh? Market expecting some hawkish tones but they should remain cautious so risk to the downside but as always we wait to see what's been factored in to the price already. Let the algos do their work and be ready with your entery/exit levels as always.
Patience and discipline in trading are key as ever and not being greedy as we continue to range tightly overall. Still some good two-way pips to be had as the jury remains out so picking your moments and levels are more important than ever.
I shall be heading away after the BOE today to complete Part 2 of my break so no update tomorrow but normal service resumed on Monday.
GBPUSD: 1.3880 still providing a decent base in the retreats and pips banked again after yesterday's rally resells between 1.3930-60 per my tweets. I remain a rally seller overall while keeping an eye on EURGBP and GBPJPY as always, and the BOE today of course. EURGBP: Capped at 0.8530 now and looking to test 0.8500 again as I type amid some EUR supply as I type which is helping to underpin GBPUSD.GBPJPY: 152.20 resistance now history after the USDJPY rally after holding 151.50 and also helping to support GBPUSD but sellers into 152.80-00 poised
I remain a GBP rally seller across the pairs but being patient as ever. These are risk sentiment markets and ever fickle so good/tight position management essential.
EURUSD: Failure at 1.1900 yesterday and dumped amid the Clarida comments and USD demand and 1.1850 support now broken again. Large option interest today again very much in play as I've been warning. General EUR supply elsewhere with cross flows very much making an impact still. USDJPY: A good hold of 108.80 before the Clarida spike and 109.40 now providing a good base with option interest at 109.50 in plaY but sellers poised at 109.80 as we continue to range tightly. EURJPY: 130.00 now providing resistance but underpinned at 129.50 by the USDJPY demand. Rally sellers still poised on core pairs. USDCHF: A decent hold of 0.9020 again with the SNB always keeping an eye on matters but the Clarida spike failing at 0.9080. EURCHF: 1.0720 being tested again after failing above 1.0740. SNB shadow ever present but sellers still poised.
AUDUSD: A good cap at the strong 0.7425-30 offers just before Clarida stepped up and pushed the pair down to 0.7370 in a rush. USDCAD: Finding support at 1.2520 again as I type after capping at 1.2560 (per my orderboard) with large option interest today at 1.2525-30 and 1.2550 in play along with the CADJPY oil/risk related action.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.41 BST