Tuesday 16 March 2021
Risk sentiment is steady as US bond yields rise again with eyes the latest decision and presser from the US Fed tomorrow. Some firmer USD tones therefore but the Pound has come in for another reality check and retreated across the board after the recent support/rallies. Nothing particular but some justifiable caution with BOE in play on Thursday.
More concerns about the Astrazeneca vaccine and German ICU doctors yesterday calling for an immediate return to partial lockdown is having limited negative impact for the moment but, as always, the FX jury remains out still so we need to focus on price action and value for money in our entry and exit levels. Discipline and patience needed more than ever in these ever fickle/fragile times.
Another reminder that the US moved their clocks forward by 1 hour at the weekend so only 4 hours behind GMT now. Option expiries, data and the Fed will all be one hour earlier in Europe therefore. From the earlier sizeable moves at 07.00 GMT it might also be reasonable to deduce that our 08.00 algo man is from across the pond but let's see if the pattern continues.
GBPUSD has finally broken down through 1.3850 and 1.3820 support helped by the firmer USD tones and EURGBP pushing up through 0.8600 to post 0.8628.Next support at 1.3800 and larger at 1.3750.EURGBP has finally broken up through 0.8600 on the GBP reversal despite the EU vaccine rollout concerns and posting 0.8630 as I type (GBPEUR down to 1.1580).Support building now at 0.8600 where we also have large options interest over the next two days. I prefer buying dips still and those holds of 0.8550 when under real pressure may yet prove important in the longer term but rally sellers still poised for the moment.GBPJPY duly ran out of oxygen and capped into 152.20 with rally sellers on core pairs both poised still and some ever-fragile risk and now down through 151.00.
I remain poised to sell GBP into rallies as a jobbing preference but respecting dip demand still with price action ever fickle. Equally a case still for going long in the dips therefore as we continue to range at these lower levels. Patience, entry/exit level and not getting greedy remain key.
USDJPY found support at 108.95-00 this time helped by some options yesterday and general firmer USD tones and has made steady gains through 109.20-25 again but rally sellers prevailing again around 109.30. EURJPY still finding support at 130.00 but equally still has good cap at 130.50 as core pairs find rally sellers.EURUSD has based at 1.1910 again ahead of decent option interest but equally sellers at 1.1940-50 amid firmer USD demand and fragile EUR sentiment. USDCHF found support at 0.9260 this time after another retreat from 0.9310 as EURUSD fell and EURCHF held 1.1050 after breaking that 1.1080 line with the SNB ever watchful/helpful.
AUDUSD found a decent base again at 0.7720-30 helped by more large expiry interest but failing at 0.7760 this time and now having a look at 0.7710 again. Ranging still for the moment.USDCAD is finding support at 1.2470 amid the firmer USD tones and as oil trades off its highs this morning but has sellers at 1.2500 prevailing for the moment.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.23 GMT
GBPUSD 1.3832
EURUSD 1.1923
EURGBP 0.8620
GBPEUR 1.1600
GBPAUD 1.7911
GBPCAD 1.7277
GBPJPY 151.07
GBPZAR 20.5548
GBPHKD 10.7224
USDJPY 109.21
USDZAR 14.8830
EURJPY 130.25
EURCHF 1.1063
EURHKD 9.2434
AUDUSD 0.7724
USDCAD 1.2490
USDCHF 0.9276
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