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Writer's pictureMike Paterson

Greenback under pressure amid US Fed negative rate signals

Friday 8 May 2020

US Fed Funds futures for January 2021 posted above 100.00 yesterday in late European trading and that triggered lots of market/algo chatter on US interest rates turning negative and down came the Greenback to give up a lot of its daily gains in rapid fashion.


The jury remains out but with markets in the UK and France both closed today for VE Day remembrance liquidity will be a little thinner with focus on US NFPs as their latest economic indicator following on from yesterday's understandably awful jobless claims data.


GBPUSD yesterday continued its retreat and eventually posted 1.2267 as per my Tweets but the Fed Funds-related US supply then kicked in to post 1.2350, then 1.2380 before reteating to test 1.2350 defence I tweeted about before rallying back above 1.2400 only to fail again.Keep up at the back! EURGBP capped at 0.8791 (GBPEUR support 1.1375) and retreated to now look at 0.8735 as the GBPUSD rally outstripped that of EURUSD given its initial greater fall. GBPJPY found good support around 130.80 on its latest retreat yesterday but capping at 132.00 again.


I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always.


USDJPY has held the 106.20 line again after failing around 106.60 amid those large expiries that I mentioned yesterday and then the USD Fed Funds retreat. EURJPY yesterday held 114.80 on its latest retreat before failing at 115.50 on the subsequent rallies only to then find dip support as core pairs both do similar. EURUSD had a quick look below 1.0780 but the USD supply pushed it back up to 1.0825-30 then test the next pivot at 1.0850 before running out of steam again as the EZ concerns continue. USDCHF has held 0.9700 again on its latest retreat as EURUSD rallied with EURCHF still holding 1.0520 amid the SNB still supporting.


AUDUSD has made the most of the USD retreat and a little better risk sentiment to power its way up to look at 0.6550 and looks underpinned for the moment again as I warned yesterday despite my rally-sell preference overall.

USDCAD has this time failed around 1.4100 and retreating this morning to look at 1.3930.


 *******  1-2-1 Mentoring Session Price Special: ******** GBP 55 per hour from GBP 95 per hour for existing subscribers. Limited offer extended for one more week so make sure you take advantage.


A special price as a gesture to subscribers in these strange times and proving to be very popular so don't miss out. You don't need me to tell you that there's lots going on right now, and the foreseeable future, so don't forget to take advantage of my 1-2-1 mentoring sessions if there's areas of trading these volatile markets or how to make best use of the order boards and expiries, 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. Make sure you get some rest over the weekend.


Interbank rates:  08.35 BST

GBPUSD   1.2381

EURUSD   1.0831

EURGBP   0.8745

GBPEUR   1.1434

GBPAUD   1.8986

GBPCAD   1.7269

GBPJPY   131.76

GBPZAR   22.8588

GBPHKD   9.6021

USDJPY   106.38

USDZAR   18.4461

EURJPY   115.22

EURCHF   1.0530

EURHKD   8.3978

AUDUSD   0.6522

USDCAD   1.3942

USDCHF   0.9721


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