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  • Writer's pictureMike Paterson

USD demand and risk-off sentiment after an upbeat NFP report

Monday 8 July 2019

The key NFP jobs report on Friday came in a little mixed but above general expectations overall and we saw immediate grabbing of the Greenback, then later again into the afternoon fixing. Since then the odds of expectation on Fed rate cuts has softened but so therefore has risk-sentiment as the jury remains well and truly out still. Throw in some general global fragility/ongoing trade talk concerns, Turkey's Erdogan further tightening his grip by sacking the central bank governor, snap election and a new PM in Greece and we remain in cautious mode.

GBPUSD broke down through 1.2550 but stalled into 1.2500 after the immediate US data-led drop only then to break down through the strong support at 1.2500 to post lows of 1.2481 not seen since the turn of the year. Cautious Brexit tones from BOE's Carney again plus the ongoing Tory leadership bunfest adding to the bearish sentiment but we've seen some general USD selling return as traders take money off the table.

EURGBP continues to find dip demand with EURUSD also supported in the dips but equally still can't get through those 0.8980-85 offers (GBPEUR demand around 1.1130). GBPJPY rally sellers remain poised but equally seeing some dip demand around 135.50 as USDJPY remains underpinned post-NFP.

I remain GBP bearish overall still and will continue to rally-sell as my preferred strategy amid all the uncertainty/indecision including Brexit/political fallout but happy to buy back in the dips as always.

EURUSD found the expected support into 1.1200 on Friday but similarly can't get back above 1.1250 so far. Good- size option expiry congestion today between 1.1250-65 should help to contain/cap any rallies along with the Turkey/Greece concerns as risk-off sentiment continues to provide sellers in core pairs. USDJPY has a few option expiries again today between 108.00-50 to keep the range contained amid the USD and risk uncertainty but has failed above 108.60 after breaking up through the 108.20-30 area. USDCHF remains underpinned and posted highs of 0.9932 after NFPs but since capped by some general CHF demand/EURCHF supply.

AUDUSD found support around 0.6960-65 as per recent order boards so you should have been fore-armed and made steady gains since but still awaiting a test of decent 0.7000 sell interest.USDCAD didn't find any comfort from the US jobs report as it had stronger Canadian jobs data to bolster C$ and we've been down to test 1.3150-60 but rebounding sharply only to fail around 1.3125 and drifting steadily lower.

Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

Have a good day/week out there one and all.

Interbank Rate 08.23 BST

GBPUSD   1.2514

EURUSD   1.1225

EURGBP   0.8970

GBPEUR   1.1147

GBPAUD   1.7901

GBPCAD   1.6351

GBPJPY   135.57

GBPZAR   17.7590

GBPHKD   9.7021

USDJPY   108.34

USDZAR   14.1656

EURJPY   121.62

EURCHF   1.1128

EURHKD   8.7046

AUDUSD   0.6989

USDCAD   1.3067

USDCHF   0.9912

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