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Writer's pictureMike Paterson

Softer risk sentiment and the Pound retreats amid the Brexit noise

Tuesday 22 October 2019

UK PM Johnson will today try and get his Withdrawal Agreement through and then a 3-day legislation period with a view to still leaving on the 31 Oct but there's a number of amendments to be voted on later today from 18.00 GMT that can still thwart his plans and look likely to at this stage. Meanwhile Tusk will ask EU leaders to decide on granting any further extension.For a decent summary on what happens next in the sorry Brexit saga try this https://www.bbc.co.uk/news/uk-politics-50133958


US treasury yields are dropping again this morning and that's inspiring a few risk-off plays but its all ranging still overall as the jury remains out on the US Fed, Chinese trade talks et al.


GBPUSD still continues to provide good two-way pips regardless of your trading bias but yesterday's hold of 1.3020-30 as per my tweet proved a good one for rally sellers but caution still needed both sides of the coin. EURGBP has also enjoyed good two-way business and holding 0.8575 (1.1660) again but remains a little soft as EURUSD retreats too. GBPJPY also continues to see good two-way trading with yesterday's solid rally stopping at 141.35 and since retreating to lows of 140.26 as I type amid the varying GBP/risk sentiment combo.


I will continue to rally-sell GBP as my preferred strategy overall too amid the ongoing Brexit uncertainty but always happy to buy back in the dips still. I repeat that this could still have a number of outcomes and remains pure guesswork/conspiracy theory at this time. Equal case for GBP longs still as I've been highlighting for a number of days now.


EURUSD failed into 1.1180 with yesterday's large option interest into 1.1200 providing a decent cap and now testing support around 1.1130.USDJPY still remains tightly bound too amid the variable USD and risk sentiment.

USDCHF has found support at 0.9850 as EURUSD retreats with EURCHF still underpinned given the SNB being ever vigilant.


AUDUSD failed above 0.6880 and now posted fresh recent lows of 0.6861 but support at 0.6850 where we have large option expiries today, while USDCAD has broken down further to post 1.3072 and looking a little soft as C$ feels a little love from Trudeau being returned as PM.


Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.


Don't forget I offer 1-2-1 mentoring if there's areas of trading this latest volatility, or how to make best use of the order boards and expiries that you might need some further help with.


Have a good day out there one and all.


Interbank Rate 08.45 BST

GBPUSD   1.2947

EURGBP   0.8605

EURUSD   1.1141

GBPEUR   1.1617

GBPAUD   1.8856

GBPCAD   1.6943

GBPJPY   140.47

GBPZAR   19.0173

GBPHKD   10.0378

USDJPY   108.52

USDZAR   14.6946

EURJPY   120.90

EURCHF   1.1010

EURHKD   8.6406

AUDUSD   0.6864

USDCAD   1.3090

USDCHF   0.9883


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