Wobbly risk sentiment returns
Wednesday 7 October 2020
Last night Trump said there would be no COVID rescue stimulus ahead of the election and we saw risk appetite tumble again. Tweets from him since that he could still sign-off on stand-alone parts of the package has helped calm markets a little but it's all very fragile out there still.
GBPUSD found a base at 1.2865 in the risk-off tumble after failing above 1.3000 yesterday but has since been back to look at 1.2930 with GBPJPY demand notable again. EURGBP broke out of the recent range as EURUSD rallied through 1.1800 but ran into sell interest at 0.9125 again coincidentally with some positive Brexit news sending it back down before then finding dip buyers around 0.9080. GBPJPY remains underpinned as core pairs find dip demand and has held 136.00 on the risk-off retreat from 137.40 but currently back up to 136.85 on the better risk tones.
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 still in a state of uncertainty overall.
USDJPY has found a base at 105.50 where today we have large expiry interest and now broken up through 105.80 on the better risk/USD tones this morning to post 105.94. EURJPY also turning back up to 124.50 as I type on the better risk tones and core pair dip demand after the retreat from 124.75 to 123.85. EURUSD saw a decent rally yesterday amid the general EUR demand but those option expiries at 1.1800 and 1.1820-30 proved crucial in capping the buy interest and we've been back down to test 1.1730 before bouncing to 1.1765 this morning.USDCHF is testing 0.9180 again after holding the key 0.9130 area again as EURUSD sellers return with EURCHF steady and SNB casts its shadow still.
AUDUSD has fallen to test 0.7100 on the risk-off retreat helped by AUDJPY supply but bouncing to look at 0.7150 this morning.USDCAD failed above 1.3330 but equally held 1.3250 amid the variable risk/USD/oil price plays.
Markets are ever-fickle so don't forget to contact me if there's areas 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: 08.38 BST