Wednesday 29 July 2020
Another busy 24 hours but it's been notable for more USD supply and given an extra kicking yesterday after the US Fed announced an extension to December 31 of its COVID-19 assistance lending facilities that were scheduled to expire on or around September 30. The announcement ahead of the latest FOMC decision and presser later today has only added to the dovish expectations.
Gold has been back up to $1970 after holding $1900 and equities are once again on the rise after also finding dip demand and supported by the Fed news.As I've been saying for a while it's all still very fickle out there so we'll continue to trade with caution and not get greedy.The trend may be your friend but there's nothing called a certainty in FX.A case of sell rumour/buy fact on the FOMC outcome perhaps? I'll email some further thoughts later.
GBPUSD has posted fresh highs of 1.2976 this morning on the latest wave of USD supply having held 1.2900 on its initial retreat yesterday. EURGBP failed above 0.9120 and has retreated to test 0.9050 support amid some general EUR supply and that fall helped GBPUSD to rally further too.Still underpinned by the month-end demand but rally sellers poised for the moment and we could see some further declines if GBPUSD breaks 1.3000 to trigger stops. That may well depend on how the FOMC aftermath plays out.GBPJPY found support at 135.40 then 135.70 this time around but equally failing above 136.00 for the moment as USDJPY falls to 104.80.
I stay poised to sell GBP rallies overall as my preferred side and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. I still expect to continue seeing some dip demand but cross-flows, risk sentiment and Brexit will continue to see a mixed bag as we've been witnessing.
USDJPY has been down to 104.80 this morning amid the renewed USD selling generally while EURJPY found support at 123.00 this time round after a steady decline from 123.80 but has failed into 123.50 so far and that should be a pivotal line now. EURUSD failed into 1.1750 and retreated to test 1.1700 amid the general Euro supply but now posting 1.1765 in Europe amid the renewed Greenback selling again.USDCHF duly capped at 0.9230 where I warned sellers were lurking/building yesterday and retreated to the other pivotal 0.9180 area but now further to 0.9140 on this morning's EURUSD rally with EURCHF also in retreat but still underpinned and the SNB ever vigilant in the dip. The FOMC decision will have impact on all USD plays ofc but there's a few hours to go yet.....
AUDUSD found a decent base at 0.7120 again and has been up to look at 0.7200 this time amid the USD supply with rising Gold/metals price still helping to support as well. USDCAD failed above 1.3400 again and has retreated to 1.3340 amid the softer USD/firmer oil price combo again this morning.
Markets are ever-fickle so don't forget to contact me if there's areas of these markets that you might need some further help with.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.41 BST