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  • Writer's pictureMike Paterson

Forex jury still out amid variable risk tones

Tuesday 27 July 2021

Still seeing come variable risk tones but the Pound has enjoyed a good start to the week as COVID cases drop for the 6th consecutive day and some ongoing firmer risk GBPJPY demand helped underpin GBP across the board yesterday.

BOE's Vlieghe offered his usual dovish tones yesterday and we saw a small retreat but the GBPUSD hold of the pivotal 1.3780 was telling and 1.3800 offers were soon history amid the renewed demand. Seeing some retracement as I type. Focus this week is on the latest FOMC decision and presser tomorrow with today bringing the latest US Duarable Goods data at 12.30 GMT. China and HK stocks and Bitcoin having another wobble.

Early month-end flow signals point to some USD selling particularly versus JPY. Recent indicators have been mixed to say the least so I'm making no predictions., just passing you the info.

Patience and discipline in trading are key as ever and not being greedy even with some greater levels of intra-day volatility returning. Still some good two-way pips to be had as the jury remains out so picking your moment and levels is more important than ever.

A reminder that this will be my last update this week as I'm heading away for a few days much-needed break, to celebrate my girlfriend's birthday. Possibly cutting into a bit of next week too but I'll let you know.

GBPUSD: 1.3780 now providing a decent/pivotal base but sellers prevailing above 1.3830 so far. I remain a rally seller overall while keeping an eye on EURGBP and GBPJPY as always.EURGBP: Capped at 0.8560 and 0.8540 broken but the old 0.8530 support line holding so far and helping now to cap Cable.GBPJPY: 152.60 providing a good cap now and testing 152.20 as I type amid some softer risk tones.

I remain a GBP rally seller across the pairs but being patient as ever. These are risk sentiment markets and ever fickle so good/tight position management essential.

EURUSD: 1.1770 providing a base yesterday but a cap again at 1.1820 amid some general EUR weakness after 1.1800 gave way. Cross flows very much making an impact still to keep the range contained.

USDJPY: 110.00-10 still providing good support after a cap this time at 110.40 as we continue to range tightly.

EURJPY: 129.70-80 in range now after after a cap at 130.30 amid general EUR selling and softer risk tones.USDCHF: 0.9170 broke as EURUSD rallied into 1.1820 and with EURCHF breaking down into 1.0800 but with the SNB ever vigilant. EURCHF: Now testing 1.0800 this time with SNB shadow/help ever present after capping at the 1.0820 area amid the general EUR weakness.

AUDUSD: Capping at 0.7390 helped by yesterday's option interest and now testing 0.7350 amid the softer risk tones.

USDCAD: Capping at 1.2600 again but holding 1.2530 in the extended retreat so far and rallying to 1.2575 amid the softer risk tones variable oil/CADJPY impact.

Let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates: 07.08 BST

GBPUSD 1.3816

EURUSD 1.1797

EURGBP 0.8539

GBPEUR 1.1711

GBPJPY 152.23

GBPZAR 20.5370

GBPHKD 10.6991

USDJPY 110.18

USDZAR 14.8906

EURJPY 129.98

EURCHF 1.0806

EURHKD 9.1360

AUDUSD 0.7371

USDCAD 1.2556

USDCHF 0.9158

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