Wednesday 24 October 2018
Plenty out there to spook markets still and risk-off sentiment is still prevailing understandably but we've seen a little calm return as equity markets stage a modest recovery. The jury remains well and truly out though.
GBPUSD has had another roller-coaster 24 hours on Brexit headlines with reports of some conciliatory tones from the EU sending the pair sharply higher to 1.3045 from 1.2980 on an algo-led move only for yet another reality check combined with the 1.3050 sellers I mentioned yesterday and send the pair down to lows of 1.2935 this morning. The risk-off sentiment means we've seen more GBPJPY and GBPCHF selling and that's helping to cap core pairs. Some sell interest now at 1.2960, then 1.2980 and 1.3000, 1.3020 and 1.3050 again with immediate demand around 1.2930 still then 1.2900, 1.2880 and 1.2850. I remain a GBP rally seller and the strategy continues to work well.
EURGBP has been tightly bound with pressure on the Euro cancelling out the weaker GBP tones and we should see that continuing as we wait on the ECB interest rate policy meeting tomorrow. Sellers still poised between 0.8850-60 then larger at 0.8880 and 0.89002. Immediate bids/support at 0.8820 again then larger at 0.8800 and 0.8780-85.
EURUSD has fallen to 1.1416 this morning on weak PMI data and remains on the back foot as I type. Large option contracts at 1.1450 rolling off today which should remain in play along with tomorrow's ECB meeting second-guessing.Bids/support still at 1.1400 and 1.1385 then 1.1360, 1.1330 and 1.1300 where barrier option interest will provide decent support. Sellers poised now at 1.1450 then 1.1480-85, 1.1500, 1.1530 and 1.1550-60 still.
USDJPY had a very brief look below 112.00 yesterday but once again found support with large option contracts rolling off down there today and has rallied to 112.65 on the general Greenback grabbing albeit tempered by the risk-off Yen demand. Bids/demand now between 112.20-30 then 112.00 and 111.85 still with decent sell interest still between 112.80-113.00. I remain a rally seller for the moment. USDCHF has had another look at 0.9980 as I type but rallies also capped by CHF demand helped by renewed EURCHF selling down to now post 1.1375. More bids at 1.1.1360, 1.1330 and 1.1300 with sellers now at 1.1400, 1.1430 and 1.1450. USDCHF bids still at 0.9930 then 0.9900 and 0.9880 with sell interest around 0.9980 still then larger into 1.0000. Happy to trade both sides of the price action at the moment.
AUDUSD failed above 0.7100 again and has fallen back to to test 0.7080 this morning amid the general USD demand. Demand still at 0.7045-50 then 0.7030 and 0.7000 with sellers poised now around 0.7100 again then 0.7120 where decent size option interest should help cap rallies. USDCAD has been trading tightly with with focus still on tonight's BOC interest rate meeting where a hike is widely expected and that's helping the Canadian $ a little in the near term.Immediate sell interest still at 1.3120 then 1.3150 with buyers at 1.3060, 1.3030 and 1.3000.
Fickle Forex markets ever prevailing so get your orders in to take full advantage of these moves.
Last night the mighty Shrimpers of Southend United, and me, were back at the hallowed Hall for another league game after Saturday's dismal display and produced an impressive return to form to beat a team four places higher. Happy times.
Have a good day out there one and all.
Twitter: @MSPFX and @MikePatersonFX
Interbank Rate 08.48 BST
GBPUSD 1.2951
EURUSD 1.1433
EURGBP 0.8827
GBPEUR 1.1328
USDJPY 112.53
USDCAD 1.3084
USDCHF 0.9967
GBPAUD 1.8265
GBPCAD 1.6946
GBPCHF 1.2909
GBPZAR 18.4353
GBPHKD 10.0409
EURHKD 8.8646
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