Friday 29 November 2019
Markets continue to make their mind up/count down to Xmas and we're seeing little by way of any momentum still as November ends. A touch of feast or famine about FX moves at the moment, and indeed for a while, as we tend to fumble around in ultra-tight ranges then have a move of varying degree before consolidating again. Once upon a time we might have expected to see some volatility in thin liquidity given the US Thanksgiving or any key holiday, and we still yet might given any month-end flows left in the pipe, but in these days of robot-reactive rather than trader-proactive moves (as in my day) we must sadly resign ourselves to ongoing tight ranges.
All the more reason then to be ready with your preferred entry/exit levels and be ready to jump on any moves of note as I always preach. Don't get greedy or impatient and don't over-analyze. In these markets natural flows are more relevant/important than ever whether it be option expiries, order boards, M&A et al so keep it simple and literally go with the flow.
Talking of which GBPUSD duly found sellers/resistance into 1.2950 yesterday and retreated to test 1.2890-00 where decent size (GBP700m is influential in these tight markets) option expiry support lay in wait but we've failed to get back above 1.2925 offers amid some general USD demand prevailing still. EURGBP has held the 0.8500 support but holding so far too with EUR1.4bln now in expiries rolling off today between 00-20 and with the last of the month-end BUBA demand in play and providing further support. GBPJPY remains underpinned but tightly bound and lower again after it's recent spike to 141.87.
I will continue to rally-sell GBP as my preferred strategy overall too amid the ongoing Brexit/Election uncertainty but happy to buy back in the dips as ever. In essence the general uncertainty and can kicking continues and for me that's still Pound negative overall but I respect that others (and the algos) see it differently). Remember we're ranging still so don't get too greedy whatever your bias.
EURUSD remains on the back foot and tightly bound around 1.1000 still surrounded by ongoing option expiry interest. Today sees EUR1.4bln between 1.0980-00 and 1.3bln at 1.1025-30 again. USDJPY remains underpinned but equally tightly bound around 109.50. USDCHF remains underpinned too but rallies still tempered into 1.0000 by decent offers and some ongoing EURCHF supply above 1.1000 with the Euro on the back foot overall.
AUDUSD held 0.6750 and has popped up to test 0.6780 but sellers still poised while USDCAD continues to trade tightly but underpinned by the general USD demand.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
No football for the soggy Shrimpers given our lack of participation in the FA Cup but let's hope England's cricketers can fare a little better over the w-e down in New Zealand.
Have a good day/weekend out there one and all.
Interbank rates: 08.45 GMT
GBPUSD 1.2906
EURUSD 1.1005
EURGBP 0.8526
GBPEUR 1.1727
GBPAUD 1.9043
GBPCAD 1.7149
GBPJPY 141.40
GBPZAR 18.8791
GBPHKD 10.0021
USDJPY 109.54
USDZAR 14.6289
EURJPY 120.57
EURCHF 1.0996
EURHKD 8.5292
AUDUSD 0.6777
USDCAD 1.3284
USDCHF 0.9990
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