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  • Writer's pictureMike Paterson

Greenback has another wobble

Wednesday 13 January 2021

Seems the initial start-of-year upward correction for the US Dollar has come to an end, for the moment at least, after some solid USD selling again yesterday amid variable policy talk from US Federal Reserve heads and a fall in US Treasury yields.

The jury is still deciding whether the old trend has resumed or just another move in the ever-fickle world of Forex as the Greenback finds a few buyers in the dip. Either way, we're seeing some good two-way business so keep your focus on the price action and key levels breaking/holding and don't over analyze or look too far ahead.

GBPUSD yesterday held the pivotal 1.3535-45 area to rally strongly now to test 1.3700 helped by those hawkish BOE comments from Governor Bailey and the USD supply later in the day and further driven by EURGBP continuing its retreat.I remain cautious on re-sells still for the moment. EURGBP initially held 0.8950 as per my tweets but the downward momentum kept up the pressure and now taken out the 0.8925-30 bids/support to test the next layer at 0.8900 (GBPEUR up to 1.1240). GBPJPY quickly broke up through 141.30 led by firmer GBP tones but capped initially into 142.00 as USDJPY fell through 104.00 and rapidly tested 103.70 but since found another base at 141.60 and breaching 142.00 as I type as firmer risk tones and core pair demand return.

I still have a naturally bearish stance on GBP overall and remain poised to sell into rallies but respecting current demand again. No need to rush back in for the moment.

USDJPY capped above 104.30 post-expiry time as per my tweets and then finally broke 104.00 on the USD supply after triggering stops to quickly test 103.70 but finding solid support into 103.50. EURJPY duly failed into the pivotal 127.00 area ( was recently strong support if you recall) but has held 126.50 again this morning on the retreat.EURUSD held 1.2130 again on its retreat yesterday but equally failing around 1.2220 with cross-pair selling weighing heavily again.USDCHF has held support at 0.8850-60 after its failure around 0.8920 on the increased USD supply yesterday but with the SNB ever watchful and EURCHF holding 1.0800 still.

AUDUSD found support at 0.7700 and then enjoyed the USD supply ride to test 0.7780 before retreating. The move once again confirmed my view on the expected dip demand but rally- sellers poised still so let's see what the extent of this retreat is.USDCAD has held 1.2730 on its latest retreat after failing at 1.2780 amid the softer USD/firmer oil tones but finding a few dip buyers so far this morning.

There's little doubt that we live in strange times and rationale was thrown out the window a long time ago so as we look at trading opportunities to begin the year it's even more important not to over analyze but trade the price action with discipline and patience.

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

Interbank rates: 08.33 GMT

GBPUSD 1.3680

EURUSD 1.2194

EURGBP 0.8914

GBPEUR 1.1218

GBPAUD 1.7642

GBPCAD 1.7413

GBPJPY 141.93

GBPZAR 20.9294

GBPHKD 10.6139

USDJPY 103.75

USDZAR 15.2820

EURJPY 126.53

EURCHF 1.0813

EURHKD 9.4615

AUDUSD 0.7754

USDCAD 1.2727

USDCHF 0.8868

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