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  • Writer's pictureMike Paterson

Risk reversal sees sentiment firmer

Tuesday 19 January 2021

In the ever fickle world of forex, and indeed risk sentiment, we've seen a reversal in tone and the US Dollar since this time yesterday and that theme is continuing this morning with equities and commodities on the rise again amid a softer Greenback.

Still ranging overall though as the jury remains out still so keep playing what's in front of you and don't over analyze.

GBPUSD duly based at 1.3520 yesterday as per my tweet and now back up to 1.3600-10 amid the softer US Dollar tones and where are have some decent option contract interest today.EURGBP is still ranging 0.8885-0.8925 (GBPEUR 1.1215-60) as core pairs both have their own moments but generallY working in tandem with the changes in USD sentiment. GBPJPY has rallied well on the firmer risk and firmer GBP tones but failed at 141.60 as the jury remains out.

I still have a naturally bearish stance on GBP overall and remain poised to sell into rallies but respecting dip demand still with price action ever fickle. Not getting greedy.

USDJPY is having another look above 104.00 after holding 103.60-65 yet again with the rally helped by JPY risk-on supply.EURJPY has held 125.20 again and that's become a decent line in the sand and rallying to test 126.00. EURUSD has capped at 1.2120 after holding 1.2050 as we continue to range and with some option interest today too.USDCHF capped around 0.8925 again but finding support at 0.8880-85 again as we continue to range and with the SNB ever watchful.

AUDUSD found a base at 0.7650-60 then 0.7680 and made a decent rally to 0.7725 helped by the softer USD tones and risk-on AUDJPY demand as the general Forex rollercoaster ride continues.USDCAD failed at 1.2800 but has based this time at 1.2720 amid the variable USD/oil price and now back up testing 1.2750 as I type.

There's little doubt that we live in strange times and rationale was thrown out the window a long time ago so as we look at trading opportunities to begin the year it's even more important not to over analyze but trade the price action with discipline and patience.

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

Interbank rates: 08.28 GMT

GBPUSD 1.3593

EURUSD 1.2117

EURGBP 0.8913

GBPEUR 1.1217

GBPAUD 1.7620

GBPCAD 1.7310

GBPJPY 141.36

USDJPY 104.00

EURJPY 126.00

EURCHF 1.0770

AUDUSD 0.7712

USDCAD 1.2736

USDCHF 0.8890

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