Wobbly risk sentiment again as another week gets underway
Monday 11 January 2021
A new week and same old fragile backdrop with COVID, second Trump impeachment, uncertain global economic outlook and Biden promising trillions of stimulus all in the mix. Throw in the fun and games on Bitcoin seen since Friday(down $7k and up $3k) and we're still very much in wobbly risk territory with equities and oil softer too.
Some good two-way FX business to be had still though, albeit with a slightly USD+ bias, as the jury remains out with price action fragile so continue to be patient but not greedy on your entry/exit levels.
GBPUSD has finally broken down through 1.3530-35 to test 1.3480 bids/support amid the general USD demand before rallying back above 1.3510 ss I type but sellers still poised. EURGBP held after the dip below 0.9000 again on Friday and since back up through the 0.9030 (1.1075) pivotal area before failing again. GBPJPY has seen a steady retreat from 141.20 led by softer sentiment and rally sellers in both core pairs too to now test 140.50.
I still have a naturally bearish stance on GBP overall and remain poised to sell into rallies.
USDJPY finally broke clear of 104.00 on the USD demand but rallies tempered into 104.25 from the JPY risk-off demand while EURJPY is testing 126.80 yet again on the softer risk tones after failing above 127.30 but still tightly bound. EURUSD failed at 1.2280 in its recovery on Friday and since looked at 1.2165 amid the firmer USD tones but still ranging overall1.21. USDCHF remains underpinned around 0.8830 with the SNB ever watchful and up through 0.8880 helped by the firmer USD /EURUSD retreat but tempered by some EURCHF rally-sells too.
AUDUSD capped into 0.7800 and has found a few sellers again amid the USD demand and softer risk AUDJPY supply to retreat beyond my expectations to test 0.7680 again.USDCAD held 1.266-65 and now testing 1.27600 on the rirmer USD/softer oil double whammy withj CADJPY selling notable again.
There's little doubt that we live in strange times and rationale was thrown out the window a long time ago so as we look at trading opportunities to begin the year it's even more important not to over analyze but trade the price action with discipline and patience.
A glorious and crucial but nail biting 1-0 win for the mighty Shrimpers after scoring in the 3rd minute but playing with 10 men for most of the second half. The comeback continues.
Let's also continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.35 GMT