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  • Writer's pictureMike Paterson

Pound still on the retreat as fragile risk sentiment prevails

Thursday 16 May 2019

Groundhog Day once more. Yesterday I warned yet again about fragile conditions prevailing still, not lest of which for the Pound, and we've seen further proof of that.

Earlier today I tweeted:

"Morning all. In my last tweet before heading up to London yesterday I noted the temporary risk-on sentiment led by those #Trump auto tariff delay comments but said be prepared to fade the rallies on core pairs. Bingo. #EURUSD still got the dip demand around 1.1180 I mentioned but #GBPUSD #USDJPY #AUDUSD all lower from those rally highs and I hope you took advantage of the algos doing the heavy lifting".

GBPUSD has retreated further still to post 1.2820 helped by GBPJPY and GBPCHF supply with EURGBP also underpinned again.EURGBP dip-buyers have been prevailing again on the GBP supply but finding sellers around 0.8750 for the moment (GBPEUR support at 1.1430). GBPJPY remains on the back-foot on the risk-off sentiment/GBP supply as I've been warning but finding some decent dip demand at 140.00-20.

I remain GBP bearish overall amid all the global uncertainty/indecision including Brexit. No change to this view as I explained again yesterday.

Meanwhile EURUSD continues to find itself tightly bound amid all the EUR/cross activity and inherent Euro demand.USDJPY has traded tightly again amid the USD and risk uncertainty but has failed above 109.60 thus creating lower highs. Definitely a case of rinse and repeat still for now. USDCHF also remains on the back-foot amid the CHF demand with EURCHF also clinging to lows around the 1.1280 area I highlighted yesterday with the SNB watching closely still.

AUDUSD has also traded lower with weaker Aussie jobs data adding to the US-China trade concerns and has broken down through 0.6900 support after yesterday's option expiries rolled off as per my tweet.

Stop me if you've heard this one before but USDCAD is STILL making its mind up and tightly bound amid CAD/JPY two-way business and variable oil price.

Fickle Forex markets ever prevailing so be ready with your entry/exit levels and orders as always.

Have a good day out there one and all.

Interbank Rate 08.28

GBPUSD   1.2828

EURUSD   1.1211

EURGBP   0.8739

GBPEUR   1.1443

GBPAUD   1.8547

GBPCAD   1.7231

GBPZAR   18.2045

GBPHKD   9.9455

USDJPY   109.43

USDZAR   14.1944

EURJPY   122.67

EURHKD   8.6914

GBPJPY   140.40

AUDUSD   0.6916

EURCHF   1.1295

USDCAD   1.3433

USDCHF   1.0080

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