Jury still out as another week closes

Friday 3 December 2021

Some good two-way business still in the past 24 hours but we're seeing some firmer USD and risk tones as European trading gets underway. Gold still tightly bound too amid the uncertainty. Commodity currencies notably lower. US NFP data in focus today at 13.30 GMT and in the mix to keep the algos on their toes.

COVID/Omicron fears and unknowns very much still lurking with markets going to keep second-guessing how it might all impact CB action amid the increased economic uncertainty. Latest reports suggest less lethal outcomes for this variant hence the firmer risk sentiment but still to be confirmed.

As always, don't over-analyze but keep your focus on price action in core and cross-pairs and recent ranges to see whether we hold or break and what levels present value for money. If in doubt, stay out.

GBPUSD: Capped around 1.3335 this time and another nice retreat into 1.3260 helped by firmer USD tones. Pips gratefully banked again. GBPUSD rally sellers, including me, ever poised while keeping one eye at least on the EURGBP and GBPJPY cross flows. EURGBP: A decent retreat to test 0.8480 (GBPEUR up to 1.1785) but still ranging overall amid all the unknowns and now testing 0.8500 (1.1760) again. Expect more 2-way business amid the general uncertainty. GBPJPY: 150.00 providing the support line this time around and since rallied to test 150.75-80 amid the better risk tones. Should continue to see good two-way business as risk sentiment continues to be ever-fickle.

I remain a GBP rally seller across the pairs overall as my preferred trading side albeit still against the grain currently so being patient as ever. These markets are ever-fickle so good/tight position management essential.

EURUSD: Support at 1.1280 currently after failing to rally above 1.1350 this time round amid the firmer USD and risk tones. USDJPY: Further falls yesterday to post 112.70 but now heading into 113.50 amid the firmer risk and USD plays. Option interest in play at 113.00. EURJPY: 127.60 support once again but capping at 128.20 this time so far as Euro risk-on supply exceeds JPY selling. USDCHF: Support at 0.9190 again with the SNB ever vigilant with EURCHF struggling to hold 1.0400 now. EURCHF: Still holding 1.0400 with SNB shadow lurking still.Sellers poised 1.0430-50 again.

AUDUSD: 0.7095-00 support now history after failing to get back above 0.7120 as I have been warning over the past few days. USDCAD: Still capped around 1.2830 helped by the rise in oil price and hence CADJPY demand again but support now between 1.2780-00

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

Interbank rates: 08.50 GMT

GBPUSD 1.3280

EURUSD 1.1292

EURGBP 0.8500

GBPEUR 1.1762

GBPJPY 150.54

GBPCAD 1.7038

GBPZAR 21.2502

GBPHKD 10.3451

USDJPY 113.34

EURJPY 128.00

EURCHF 1.0402

EURHKD 8.7954

AUDUSD 0.7052

USDCAD 1.2830

USDCHF 0.9213