• Mike Paterson

Variable risk and Greenback sentiment still

Tuesday 23 February 2021

We've seen some good two way business again with the Forex jury ever-fickle amid all the bond yield and vaccine noise but JPY and CHF selling srill notable while the Pound remains underpinned after yesterdaY's COVID lockdown easing measures provided some glass-half-full cheer for the moment.

Today sees US Fed Chair Powell testifying at 15.00 GMT and BOC Gov Macklem speaking at 17.30 GMT.

GBPUSD found a base at 1.4020 then 1.4050 but finding 1.4100 a tougher nut to crack for the moment amid the variable USD plays. EURGBP is finding a cap at 0.8680 still but still holding 0.8630 for the moment as core pairs move in tandem by and large amid the variable USD plays. GBPJPY found a decent base at 147.50 again after capping at 148.30onmce more but rallying back through 148.20 amid core pairs finding dip demand.

I remain poised to sell GBP into rallies as a jobbing preference but respecting dip demand still with price action ever fickle. Equally a case still for going long in the dips therefore as we continue to range. Patience and not getting greedy remain key.

USDJPY finally broke down through 105.30 then 105.00 but dip demand notable still amid some further JPY supply. EURJPY still has dip demand at 127.50-60 but 128.30 proving also a step too far again. EURUSD has been rallying overall but atill retreating when the variable USD tones turn firmer with cross-pair flows still very much in evidence. USDCHF remains underpinned and finding good support at 0.8950 again amid reflation trade plays (CHF as a funding currency) with EURCHF also underpinned as the SNB remains ever watchful/helpful.

AUDUSD found support at 0.7850 then 0.7880 this time and cleared 0.7930 as USD selling prevailed and metal prices keep lending support but retreating as I type amid some fresh USD demand. USDCAD capped at 1.2640 this time area but equally holding 1.2580 again amid the variable USD, risk and oil tones.

Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good week one and all.

Interbank rates: 08.45 GMT

GBPUSD 1.4083

EURUSD 1.2155

EURGBP 0.8634

GBPEUR 1.1580

GBPAUD 1.7802

GBPCAD 1.7757

GBPJPY 148.12

GBPZAR 20.7195

GBPHKD 10.9185

USDJPY 105.17

USDZAR 14.7170

EURJPY 127.84

EURCHF 1.0926

EURHKD 9.4288

AUDUSD 0.7909

USDCAD 1.2611

USDCHF 0.8991

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