Markets in happy-clappy mood still

Mike Paterson
Aug 31, 2021
2 min read

Tuesday 31 August 2021

US Federal Reserve Chairman Powell's speech on Friday once again left the hawks scratching their heads in frustration but the dovish tones have sent equity markets higher with oil and gold also feeling some love and that's spilled into better risk appetite trades in Forex amid softer USD tones.

Month-end today brings the usual guess-work on USD flows but most signals suggesting some small negative bias which may already have been filtering through so impact at the 4pm London fix may be minimal but forewarned always forearmed in Forex.

Patience and discipline in trading are key as ever and not being greedy.Some good two-way pips to be had so picking your moments and levels are more important than ever.

GBPUSD: Good two-way pips to be had still whatever your bias but the risk-on GBPJPY demand has helped underpin to set up a test (and failure) of 1.3800 where we also have 200DMA techs in play. I remain a rally seller while keeping an eye on EURGBP and GBPJPY as always.EURGBP: Still supported between 0.8560-70 but equally sellers poised ay 0.8585 and larger at 0.8600. GBPJPY: A good cap at 151.60 still after holding 151.00 on the better risk tones. Ranging still overall.

I remain a GBP rally seller across the pairs but being patient as ever. These are risk sentiment markets and ever fickle so good/tight position management essential.

EURUSD: Support at 1.1780 and now testing 1.1830 amid the better risk/softer USD plays.USDJPY: A failure this time at 110.00 but 109.75-80 still presents a decent support line. EURJPY: 130.00 resistance now after a good hold of 129.50 amid the better risk tones.USDCHF: Holding 0.9100 well yesterday against the softer USD tones generally with tThe SNB ever vigiliant and helpws by better-risk EURCHF demand anyhow.EURCHF: 1.0780-00 now providing support with SNB shadow ever present and risk-on CHF supply.

AUDUSD: 0.7300 finall broken mid softer USD/firmer metals/better risk but capping at 0.7340 so far. Option interest in polay today.USDCAD: Now supported at 1.2560 where we have large option interest today after falling from 1.2630 amid the softer USD and firmer oil tones. CADJPY flows still very much in play amid the variable risk.

A great victory for our cricketers to level the series versus India and a fantastic set of results from the GB Men's Wheelchair Basketball team to reach the Paralympic Quarter-Finals as Group winners. MSPFX is proud to be supporting 6x Paralympian basktball legend Terry Bywater who is having another fabulous tournament.

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

Interbank rates: 08.43 BST

GBPUSD 1.3779

EURUSD 1.1824

EURGBP 0.8582

GBPEUR 1.1652

GBPJPY 151.31

GBPCAD 1.7361

GBPZAR 20.0112

GBPHKD 10.7338

USDJPY 109.82

EURJPY 129.86