Friday 31 January 2020
Yesterday the BOE MPC left rates on hold amid some cautious tones as I warned in my preview so I hope you all took advantage of the accurate call and rally,and the Pound is eventually finding some sustained support for the moment helped by some better risk sentiment prevailing too.
Elsewhere the coronavirus claims more victims and continues to spread but markets seem a little jaded by all the risk-off sentiment (I'm certainly jaded by the relentless grab for headline-based page views by many websites) and we've seen some reversal in recent safe haven plays.
As I warned yesterday GBPUSD saw a relief rally into 1.3100 after the BOE decision (indeed immediately prior) but then retreated to test 1.3050 only to base and retest 1.3100 before finding demand at 1.3080 and a decent line there has now been created. Highs of 1.3141 so far helped by some risk-on GBPJPY and GBPCHF demand.EURGBP has retreated through 0.8400 on the general Pound demand and with most of the month-end demand completed but expect some further interest today if only to temper further falls. GBPJPY found support at 141.50 again and now breaking up to test 143.30 amid the better risk sentiment. FX is indeed fickle eh?
I stay poised to sell GBP rallies overall and buy back in the dips as ever but continue to see some good two-way business as we continue in these tight ranges. The UK leaves the EU today but I don't feel like celebrating any time soon, even as a Leave voter back in 2016.
EURUSD remains on on the back foot but still tightly bound with large option expiries today containing moves again.USDJPY broke down through 108.75-80 but then failed at the 108.50-60 line and since been up to 109.14 on the better risk plays.EURJPY has also rallied but to a lesser degree as sellers remain poised on both core pairs.
USDCHF has duly found support again at 0.9680 as has EURCHF at 1.0680 after a decent retreat following that SNB-led spike earlier in the week.
AUDUSD has retreated again amid the Coronavirus concerns and with renewed speculation on a RBA rate cut next Tuesday and now broken down through a reported barrier option at 0.6700. USDCAD has held 1.3200 after a quick dip to 1.3192 but equally finds rally sellers poised too.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
The sorry Shrimpers are back at the hallowed Hall tomorrow after another troubled week and some utter flannel being spouted forth by our Chairman. Sad times indeed but hey, there's lots worse out there in the world to be more concerned about eh?
Have a good day/weekend out there one and all.
Interbank rates: 08.02 GMT
GBPUSD 1.3125
EURUSD 1.1026
EURGBP 0.8398
GBPEUR 1.1906
GBPAUD 1.9577
GBPCAD 1.7355
GBPJPY 143.14
USDJPY 109.03
EURJPY 120.21
EURCHF 1.0703
AUDUSD 0.6705
USDCAD 1.3220
USDCHF 0.9706
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