Monday 27 July 2020
The happy-clappy brigade are still in town and with US-China tensions and ongoing COVID resurgence concerns seemingly taking a back seat, or creating a mood of further cheap money being released by the Fed this Wednesday, we've seen further USD decline. Month-end flows are also expected to be USD-negative with the rally in US assets likely to have left foreign investors under-hedged. The average USD sell-signal is slightly above-average according to preliminary reports.
Gold is up through $1900 with equities and oil still underpinned. All still very fickle out there though 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.
GBPUSD has broken up through the top end of that 1.2670-1.2780 range amid the softer USD to post highs of 1.2859 while EURGBP has been up through 0.9130 before retreating a little but still underpinned by the looming month-end demand. GBPJPY found support into 135.00 but equally failing at 135.85 and retreating to 135.15 as USDJPY falls below 105.50.
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 finally fallen through 105.80 on the softer USD to post lows of 105.38 while EURJPY fond support at 122.80 but has failed into 124.00 and fallen to test 123.40 bids amid some firmer Yen plays as I type. EURUSD duly marched up through 1.1630 amid the general Euro demand and softer Greenback but failing above 1.1725 so far. USDCHF broke down through the 0.9230 and 0.9200 tranches of support as EURUSD rallied and EURCHF fell but holding 0.9160 with EURCHF still underpinned overall and the SNB ever vigilant in the dips.
AUDUSD found a decent base at 0.7080 and has been up to look at 0.7150 but retreating on some softer risk tones as I type and with AUDJPY selling notable again. USDCAD failed above 1.3430 and now retreated to test 1.3380 amid the softerUSD/firmer oil price combo.
Markets are ever-fickle so do contact me if there's areas of trading 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: 08.40 BST