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  • Writer's pictureMike Paterson

Euro slides and risk-off sentiment still the play

Wednesday 24 July 2019

Yesterday saw Boris Johnson become the new leader of the Tories as expected and today will officially be appointed the UK's new PM. Markets don't care about my judgement and inherent fears for the UK moving forward over the next period (rightly so) but are now seemingly agreed that it doesn't look good. That being said we've seen limited Pound movement thus far on the outcome as the jury remains out.

Elsewhere fragile risk sentiment continues and the Euro has journeyed further south ahead of the ECB meeting and expected dovish tones tomorrow (Thursday). Soggy data again this morning only adding fuel to the fire.

GBPUSD has held around that demand at 1.2430 but remains on the back foot. Some support from EURGBP selling but equally finding pressure from GBPJPY and GBPCHF selling. EURGBP has been on the slide to take out the 0.8955-60 demand as the Euro falls further generally but dip demand remains on both. GBPJPY sellers remain poised as ever amid the fragile risk prevailing still but holding 134.00 as USDJPY finds demand around 108.00 still.

I remain GBP bearish overall still and will continue to rally-sell as my preferred strategy amid all the uncertainty/indecision including Brexit/political fallout but happy to buy back in the dips as always. Johnson's appointment is not the end of anything but more the start of increased uncertainty/potential constitutional crisis as I have long warned.

EURUSD has finally tested good support at 1.1130 helped by that awful German data this morning but similarly I still look to sell rallies into 1.1150-60. USDJPY is holding 108.00 as I type with very large (c. USD4.5bln interest) today but rally sellers remain poised again on the fragile risk sentiment.USDCHF has also failed at 0.9880 helped by the EURCHF supply to break down through 1.1000 but seen dip demand at 0.9845-50 with the SNB always going to be vigilant as we continue to look soggy and CHF demand/Euro supply prevails.

AUDUSD has broken down through 0.7000 helped by some AUDJPY supply but finding support around 0.6980 so far while USDCAD remains tightly bound amid USD uncertainty, CADJPY and oil plays.

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

I'm off to cricket HQ today to watch England v Ireland so please contact your rate providers directly should you need to trade.

Have a good day out there one and all.

Interbank Rate 08.35 BST

GBPUSD   1.2435

EURUSD   1.1132

EURGBP   0.8950

GBPEUR   1.1173

GBPAUD   1.7823

GBPCAD   1.6347

GBPJPY   134.43

GBPHKD   9.6409

GBPZAR   17.3369

USDJPY   108.04

USDJPY   13.9247

EURJPY   120.30

EURCHF   1.0990

EURHKD   8.6287

AUDUSD   0.6981

USDCAD   1.3136

USDCHF   0.9870

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