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  • Writer's pictureMike Paterson

Risk sentiment improves but jury still out

Monday 5 October 2020

Trump's release from hospital is expected for today and that's given risk trades an optimistic start to the week but the overall market sentiment remains fragile.

UK's Johnson had his Brexit call with EU Commission President von dey Leyen and while they both agreed that a deal could be done they also both said that it still remains a long way off with the clock ticking.

UK Services PMI UK data just out better than expected but some key levels still holding for the moment at 137.00 and 0.9050 and 1.2960-70 as per my tweet. GBP should still stay underpinned in the dips though if risk tones remain positive. US Markit and ISM Services/Composite comes later after some less than impressive jobs/wages numbers on Friday but Trump's condition will still be the real focus as the day progresses.

GBPUSD has found a base at 1.2850 but there's a line developing around 1.2960 which is under attack as I type with GBPJPY demand notable on the better risk tones. EURGBP similarly has found a base at 0.9050 but failing into 0.9100 and retreating this morning back to 0.9060 as GBP finds support. GBPJPY currently underpinned again on the better risk plays providing core pair dip demand and now testing the previous cap at 137.00.

I stay poised to sell GBP rallies as my preferred side and buy back in the dips as ever.  Patience continues to be a virtue and entry level key as always. I still see dip demand though with markets still in a state of uncertainty overall.

USDJPY is looking to test 105.70 again on the better risk after holding 105.25. EURJPY also higher on the better risk tones. EURUSD still caught up in cross pair flows and underpinned now at 1.1700 but equally rally sellers remain poised. USDCHF failed at 0.9220 again but has held 0.9160 so far as EURUSD rallies but EURCHF also finds dip buyers on the better risk plays and SNB casting its shadow.

AUDUSD being driven higher from a 0.7160 base by the AUDJPY demand but sellers remain poised into 0.9200. USDCAD retreating to 1.3270 from Friday highs of 1.3330 on the firmer oil/CADJPY demand.

Markets are ever-fickle so don't forget to contact me if there's areas of trading these markets  that you might need some further help with.

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

Interbank rates:  09.32 BST

GBPUSD   1.2953

EURUSD   1.1741

EURGBP   0.9066

GBPEUR   1.1028

GBPAUD   1.8044

GBPCAD   1.7189

GBPJPY   136.79

GBPZAR   21.2440

GBPHKD   10.0440

USDJPY   105.64

USDZAR   16.4064

EURJPY   124.03

EURCHF   1.0772

EURHKD   9.1077

AUDUSD   0.7177

USDCAD   1.3272

USDCHF   0.9175

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