Thursday 10 December 2020
The Brexit deal gets kicked down the road again, this time until Sunday, and the Pound rightly takes another hit as I've been warning. Meanwhile, and probably all the way to the 31st, expect more hot air and chest-puffing, excuses and blame until some sort of managed compromise is produced.
Today we have the latest ECB monetary policy decision/rhetoric amid the EU Council meeting. Dovish tones from Lagarde expected but how much is priced in? I will try and send some further thoughts later if time allows.
COVID is still casting its sad shadow and markets are still second-guessing the fall out to come and the US stimulus package unknowns remain in the mix.Variable/fickle risk sentiment continues.
GBPUSD is on the back foot again and now testing 1.3330 as I type after failing above 1.3460 then 1.3380. Patience once again was a virtue yesterday for GBP sellers like me. EURGBP held around 0.9000 and now testing 0.9100 again as GBP comes under fresh attack. I remain a dip buyer overall but still respecting the Brexit-led volatility.GBPJPY capped into 140-30, then 139.80 and now testing 139.00 again as I type amid softer GBP and fragile risk sentiment.
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 rally-selling in GBPUSD is still bringing reward but entry level key as always. Definitely still expecting some dip demand amid all the volatility as I've warned for a while now. Brexit still the large elephant in the room.
USDJPY has held 104.00 again and now making headway above 104.50 amid some general USD demand but sellers remain poised. EURJPY has found a base now at 125.80 and now testing 126.50 as core pairs both find dip demand amid the sentiment and cross flows. EURUSD has fallen again but held up by some decent option interest today between 1.2045-60 and now back above 1.2100 but still tightly bound as the jury remains out on Brexit and the ECB with cross flows definitely in play. USDCHF is still tightly bound and clinging on around 0.8880 still having failed above 0.8910 with EURCHF falling/EURUSD rallying but with the SNB still ever watchful.
AUDUSD staged a retreat from 0.7480 yesterday and some buy backs duly made into 0.7430 but better risk AUDJPY demand and firmer iron ore prices has kept the pair underpinned and now testing 0.7500 as I type. USDCAD held onto 1.2775 again but capping at 1.2830 again amid the variable USD and risk sentiment.
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: 08.35 GMT
GBPUSD 1.3320
EURUSD 1.2090
EURGBP 0.9076
GBPEUR 1.1016
GBPAUD 1.7804
GBPCAD 1.7042
GBPJPY 139.23
GBPZAR 19.9910
GBPHKD 10.3270
USDJPY 104.54
USDZAR 14.9970
EURJPY 126.39
EURCHF 1.0754
EURHKD 9.3745
AUDUSD 0.7479
USDCAD 1.2798
USDCHF 0.8893
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