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  • Mike Paterson

USD demand still amid further EM wobbles

More Brexit headlines giving the Pound both relief and woe but it's trade and the emerging market currency declines still very much in focus. Carney's testimony to the UK Treasury Select Committee had the Pound up and down on fears over hard Brexit being countered by potentially tighter monetary policy.

It also looks like he'll be staying on as BOE governor through the final Brexit process.

GBPUSD has held that decent line in the sand at 1.2800 so far but the rally failed into 1.2880 and is testing the lows again as I type. Sellers now poised around 1.2830 and 1.2850 where large option contracts roll off today then 1.2880 still and 1.2900. I remain GBP bearish and a rally seller.  UK services PMI data just now was a tad better than expected but the rally has been minimal.

EURGBP has been tightly bound with in that 0.9000-30 range I highlighted. Sellers still poised around 0.9030 then 0.9050 and 0.9080 with the barrier option at 0.9100 still casting a shadow but seemingly still a long way off for the moment.Immediate demand around 0.9000 again then larger into 0.8970, 0.8950 and 0.8930 which remains a key area as does 0.8900.

EURUSD rallied back above 1.1600 after holding that decent support around 1.1530 yesterday only to run out of puff on renewed general USD demand and has now fallen back to 1.1544. More demand around 1.1530 then 1.1500 and 1.1480 with sellers now building around 1.1580, 1.1600 and 1.1620-30 still then 1.1650.

USDJPY has rallied further on the USD demand to post 111.72 but sellers remain poised at 111.80-00 as I warned yesterday. USDCHF has found support of its own again above 0.9700 to post 0.9754 but remains delicately poised with more sellers now 0.9760 and 0.9780 and CHF buyers ever ready. Dip demand still expected though.

AUDUSD felt some love again after some better than expected GDP data but sellers were poised once again above 0.7200 and we've fallen back to breach 0.7150 before finally finding some dip demand. Sell interest now at 0.7200 then into 0.7220 again where large option expiries today continue to cast a shadow and then 0.7250. Buyers regrouping around 0.7150 then larger at 0.7130 and 0.7100. USDCAD has rallied again to post highs of 1.3208 with the Canadian $ continuing to suffer over the NAFTA uncertainty. Some buyers now around 1.3160 and 1.3130 then larger into 1.3100.Sellers around 1.3220 then 1.3250. The SA Rand continues to tumble amid the EM currency sell-off and it's own poor economic performance.

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 08.50 BST GBPUSD   1.2820 EURUSD   1.1549 EURGBP   0.9009 GBPEUR   1.1099 USDJPY   111.47 USDCAD   1.3204 USDCHF   0.9749 GBPAUD   1.7912 GBPCAD   1.6930 GBPCHF   1.2500 GBPZAR   19.9697 GBPHKD   9.939311 EURHKD   8.9544

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