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  • Writer's pictureMike Paterson

Softer Greenback tones notable

Wednesday 21 October 2020

After yesterday's retreats we're seeing some positive GBP tones this morning on some Brexit headlines and our regular 07.00 GMT algo friend who goes with the flow and today pushed GBPUSD up from 1.2985 to test 1.3020 then the pair posted 1.3065 in another rush.

Softer USD tones notable across the board as markets expect a US stimulus package soon as part of the electioneering with EURUSD posting one-month highs and USDJPY testing 105.00 one-month lows again

Just another day/week in the ever-fickle world of Forex and I still say risk and USD sentiment remain fragile.

GBPUSD held 1.2910 yesterday after holding 1./2980 on a couple of rallies but this morning's move has squeezed out a few shorts now. EURGBP capped at 0.9145 yesterday and now testing the 0.9080 pivot area again amid the GBP demand. Expect good two-way business still.GBPJPY found a base at 136.30 and since seen a steady rally amid the firmer GBP tones to test 137.00 as I type.

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 and risk sentiment still in a state of uncertainty overall.Brexit remains the very big elephant in the room but also COVID lockdown fall-out too.

USDJPY has now finally broken lower amid the softer USD tones to post 104.88 but large option expiries at 105.00-10 very much in play here and should help contain. EURJPY found a decent base at 124.20 but equally capping at 125.00 and now in retreat again as core pairs find rally sellers.

EURUSD remains underpinned since breaking up through 1.1750-60 and now through 1.1800 nd 1.1850 to post 1.1870 not seen for over a month. News out yesterday that the EU first sale of bonds to finance its SURE unemployment fund drew record demand of over EUR 233bln. The fund is raising 17 billion from 10 and 20-year “social” bonds, a type of sustainable debt.The shorter bond, which will raise 10bln attracted over 145bln in final demand the highest level ever seen for a EZ bond sale.  Decent support now at 1.1825-30, and 1.1800.

USDCHF capped at 0.9100 this time as EURUSD surged higher but holding 0.9030 so far with SNB casting its shadow still with EURCHF still near its recent lows.

AUDUSD found a base at 0.7020 and has enjoyed the softer USD tones to post 0.7090 but rally sellers remain poised amid fragile risk and ongoing spats with China.

USDCAD has seen another retreat amid the softer USD tones and now down through 1.3160 and 1.3100 to test 1.3080 with oil holding firm to by and large.

Markets are ever-fickle so don't forget to take advantage of my 1-2-1 mentoring if there's areas of trading these markets or how to make best use of the order boards and expiries, 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:  08.38 BST

GBPUSD   1.3015

EURUSD   1.1854

EURGBP   0.9103

GBPEUR   1.0983

GBPAUD   1.8396

GBPCAD   1.7062

GBPJPY   136.88

GBPZAR   21.4592

GBPHKD   10.11375

USDJPY   105.11

USDZAR   16.4594

EURJPY   124.60

EURCHF   1.0721

EURHKD   9.2085

AUDUSD   0.7078

USDCAD   1.3102

USDCHF   0.9045

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