Greenback sellers prevailing but caution required still

Friday 6 November 2020

The US Federal Reserve kept their powder dry as expected amid the US Election uncertainty and ongoing COVID concerns. Powell gave little away in the presser but no surprises there either and we've seen the Greenback remain undermined as we wait on the final US Election votes to be counted, whenever that might be. Biden appears to be nibbling away at Trump in the counts still to be decided while Trump ramps up his fraud claims.

Some signs of softer risk sentiment this morning after yesterday's equity market surges with COVID still very much in the mix and Brexit casting its shadow over UK and Europe too.

GBPUSD has posted further highs of 1.3160 with GBJPY once again holding 135.60 to provide ongoing support along with the softer USD tones but falling back into 1.3100 as I type.

EURGBP is holding 0.8990-9000 still helped by large option interest today which is helping to cap GBPUSD a little but equally can't get back through 0.9050 atm.I remain a dip buyer overall while respecting the current two-way business still.GBPJPY capped at 136.20 again but holding 135.50-60 still so far and that's becoming a decent line in the sand.

No change in my basic view and I stay poised to sell GBP rallies as my preferred side and buy back in the dips as ever. Patience continues to be a virtue and entry level key as always. I still see dip demand though amid the current USD supply but risk sentiment still in a state of uncertainty overall.Brexit remains the very big elephant in the room and the negative impact of COVID still in the mix.

USDJPY has fallen further through the strong 103.60 area amid the softer USD tones/Election unknowns but holding the next line at 103.30so far while EURJPY has now capped at 122.80 but tightly bound with support into 122.25.EURUSD held 1.1800 again in the latest retreat helped by large expiries today and remains underpinned for the moment but capped at 1.1860 still.Large option expiry interest today should help contain.USDCHF has capped at 0.9060 since my FOMC preview but holding 0.9015-20 as EURUSD caps again and SNB still ever watchful.

AUDUSD has found 0.7300 a step too far and retreated to look at 0.7250 on some softer risk tones while USDCAD has now capped at 1.3100 but holding 1.3030 still and on the rise as I type with oil price a little softer and USD firmer.

Markets are ever-fickle so don't forget to contact me if there's areas 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. Have a good weekend one and all.

Interbank rates:  08.20 GMT

GBPUSD   1.3136

EURUSD   1.1837

EURGBP   0.9011

GBPEUR   1.1097

GBPAUD   1.8075

GBPCAD   1.7157

GBPJPY   135.92

GBPZAR   20.6588

GBPHKD   10.1843

USDJPY   103.45

USDZAR   15.7628

EURJPY   122.45

EURCHF   1.0692

EURHKD   9.1775

AUDUSD   0.7267

USDCAD   1.3057

USDCHF   0.9031