Monday 4 November 2019
Stronger US jobs data on Friday was tempered by softer ISM (below 50 for second month) but equity markets seemed to like it still and we've seen a little risk-on sentiment prevail but markets still very much making their mind up still. Meanwhile the UK General Election in December continues to garner a few headlines as do the US-China trade talks as algos and traders look for clues/second-guess.
GBPUSD failed again a few times above 1.2950 ahead of the growing sell interest at 1.2980 that I've been highlighting and dropped back to 1.2917 but underpinned down there by some large option expiry interest tomorrow (Tuesday). EURGBP also tightly bound but offers at 0.8650-60 still holding rallies but 0.8600 equally a decent base. GBPJPY also continues to see good two-way trading amid the varying GBP/risk sentiment combo.
A new week and month but I will continue to rally-sell GBP as my preferred strategy overall too amid the ongoing Brexit/Election uncertainty but always happy to buy back in the dips still. A decent case for GBP longs again in the dips if this tight range continues. In essence the general uncertainty and can kicking continues and for me that's still Pound negative.
EURUSD remains underpinned but tightly bound amid more large option expiry interest today at 1.1100 (EUR 1.2bln), 1.1150-60 (1.1bln), 1.1185-00 (1.2bln) so we can expect a contained range still. USDJPY has rallied on the better risk tones before running into sell interest ahead of the 108.50 offers.USDCHF has posted fresh recent lows of 0.9848 as EURUSD remains underpinned but it too has support of its own, not least of which the SNB.
AUDUSD has found a little support from from some risk-on AUDJPY demand but the pair has large (A$1.1bln) in expiries at 0.6950 today to keep range contained. USDCAD has also found itself tightly bound amid the USD/risk variables too.
Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.
Don't forget I offer 1-2-1 mentoring if there's areas of trading this latest volatility, or how to make best use of the order boards and expiries, that you might need some further help with. I develop your powers of trading discipline and psychology all learned in my 38 years in FX, including 20 as a market maker.
England disappointed on Saturday but hats off and congrats to South Africa for doing the same job on us that we did on the All Blacks last week. The Shrimpers came back pointless from their long haul North but some reasons to be a little more cheerful as set sail under a new manager.
Have a good day/week out there one and all.
Interbank Rate 08.30 GMT