• Mike Paterson

Wobbly risk appetite notable again in the ever fickle world of Forex

Tuesday 13 October 2020

Yes folks, another day and another change in sentiment as is the way in these ever-changing times helped by news that Johnson and Johnson have paused trials of their COVID-19 vaccine "due to an unexplained illness in a study participant".

Risk appetite has lessened again and we've seen another wobble in equities/oil and a flight to safer-haven currencies and to a lesser degree the Greenback. The Pound has found a few sellers again the wake of the GBPJPY supply but also some worrying labour/jobs data out earlier. Unemployment now above above 1.5 million and the rate at 4.5% versus 4.1% prior represents considerable rises over the third quarter, and now at three year-highs. As ever with data we have an ever-changing/less than accurate picture but the trend is not improving any time soon with further UK lockdown measures only going to exacerbate the scene with the services sector contrIbuting over 80% to UK GDP.

Also in the news is a report overnight from Japan that G7 fin mins will hold a virtual conference today with a join communique after and a G20 virual meeting tomorrow so watch out for headlines. No firm timings known at present.

GBPUSD currently testing support at 1.3020 again after failing around 1.3080 from yesterday's lows of 1.3006 and some re-sells duly made agin with some pips already banked on this latest retreat. Current demand still needs to be respected but FX markets remain as fickle as ever. EURGBP found support at 0.9030 as expected after failing into 0.9080 and has since remained tightly bound with core pairs both retreating amid the USD demand/softer risk combo. GBPJPY has retreated to test 137.30 again on the softer risk/GBP tones after failing at 137.80, again, and also remains tightly bound .

I stay poised to sell GBP rallies as my preferred side and buy back in the dips as ever.  Patience continues to be a virtue and entry level key as always. I still see dip demand though with markets and risk sentiment still in a state of uncertainty overall.Brexit remains the very big elephant in the room to to mention the economic fall-out from latest COVID lockdown measures.

USDJPY failed at 105.60 but equally holding 105.25-30 amid the general USD demand again while

EURJPY has failed above 124.75 as core pairs find rally sellers but support now around 124.20. EURUSD rally sellers like me prevailing again atm after capping at 1.1830 and now testing that decent support between 1.1775-80 again but Im not expecting a collapse any time soon ( just tempting the FX gods into action by saying that !). USDCHF failed at 0.9130 as EURUSD capped but also with EURCHF in retreat too on the softer risk plays but SNB casting its shadow still and holding 0.9080 so far.

AUDUSD has enjoyed a good retreat into 0.7165 support after being held up by those large option expiries at 0.7200 yesterday. Rally re-sells/buybacks duly placed again as per ongoing strategy.

USDCAD remains tightly bound amid the variable/fickle risk/USD/oil tones and failed at 1.3150 this time as per yesterday's order board but holding 1.3100-10 again.

Markets are ever-fickle so don't forget to contact me if there's areas of trading these markets  that you might need some further help with.

Let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates:  08.20 BST

GBPUSD   1.3029

EURUSD   1.1780

EURGBP   0.9043

GBPEUR   1.1058

GBPAUD   1.8157

GBPCAD   1.7101

GBPJPY   137.34

GBPZAR   21.5162

GBPHKD   10.0331

USDJPY   105.43

USDZAR   16.5252

EURJPY   124.19

EURCHF   1.0730

EURHKD   9.0732

AUDUSD   0.7175

USDCAD   1.3127

USDCHF   0.9110

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