Wednesday 13 May 2020
Yes folks, it's reality check time again as I've been warning and we've seen some risk-off plays with the Yen once more finding favour with US/China tensions still grabbing headlines s well as COVID uncertainty. The Pound has also seen further losses in the past 24 hours but found a little comfort earlier this morning from some not as bad as expected but still awful Q1 GDP data with the key services sector posting record declines. Some very soggy UK production and trade data understandably but also better than expected.
Everything is relative though and we know the worst data is yet to come, not only for the UK and Pound which also has Brexit issues to address but around the gloabe so markets are right to remain cautious.
GBPUSD saw somre great two-way business yesterday per my Tweets but duly failed at 1.2380 and continued its retreat in late European and NY trading to break 1.2280 and then test the key 1.2250 that I've been highlighting.
EURGBP has duly rallied to test 0.8860 once the 0.8800 offers were cleared out and I hope my steer helped.GBPJPY hung onto 132.20 briefly after capping around 132.80 amid some variable risk and rally sellers on core pairs but then broke to post 131.21 before rallying only to fail at 131.80. See the pattern emerging here again ? area.
I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always.
USDJPY has now fallen through 107.30 support/bids and testing 107.00 as I type amid the softer risk tones.
EURJPY also on the back foot and now down through 116.00. EURUSD has now held 1.0820 but once again failed around 1.0880 and flatlined between 108.30-60 since. USDCHF capped at 0.9730 then fell to 0.9665 as EURUSD rallied from 1.0780 with EURCHF still holding 1.0500-20 amid the SNB support but heading back now on a reverse move in the core pairs.
AUDUSD capped at 0.6530 yesterday and fell back again through the 0.6480 support helped by the softer risk tones/AUDJPY supply and some dovish tones from the RBNZ who kept rates on hold but double QE and didn't rule out negative rates down the road.AUDUSD found support at 0.6450 though and now back up through 0.6480 with large expiries at 0.6500 today proving a little magnetic. USDCAD staged a nice rally from 1.3980 but capping above 1.4080 amid variable risk and oil prices.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.40 BST