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  • Writer's pictureMike Paterson

Softer risk and firmer Greenback prevailing

Tuesday 2 March 2021

Jury still out amid all the noise on rising bond yields but we seeing some softer risk tones and firmer USD plays as equities and commodities retreat a little. The RBA left rates, rhetoric and policy on hold as expected but reiterated its commitment to aggressively manage government bond yields as per its recent interventions.

As always we need to focus on price action and value for money in our entry and exit levels. Discipline and patience needed more than ever in these ever fickle/fragile times.

GBPUSD found support again at 1.3900 after capping at 1.3960 but now broken down to post new recent lows of 1.3860 amid the current USD demand and softer risk GBPJPY supply. EURGBP found support at 0.8620 (GBPEUR sellers at 1.1600) but equally duly found rally sellers around 0.8670 (GBPEUR buyers 1.1530) but holding 0.8630 since where we have decent size option contract interest today.GBPJPY has now found a cap at 148.80-00 amid the softer risk tonesA and testing 148.20 as I type.

I remain poised to sell GBP into rallies as a jobbing preference but respecting dip demand still with price action ever fickle. Equally a case still for going long in the dips therefore as we continue to range but I still feel the recent rally somewhat over-cooked. Patience and not getting greedy remain key.

USDJPY has found dip demand at 106.60-70 amid some further USD demand and now back up testing 107.00 but rallies tempered by fresh risk-off JPY supply on the crosses. EURJPY capped at 128.80 this time and now testing 128.25 bids as I type. EURUSD capped at 1.2060 and now testing strong suppoort around 1.2000 this morning amid the firmer USD tones and rally sellers remain poised as I warned yesterday. USDCHF has enjoyed the USD rally to post 0.9180 as EURUSD retreats and with EURCHF underpinned still as I warned yesterday with the SNB ever-watchful/giving a helping hand.

AUDUSD found a cap above 0.7780 but equally has found support since at 0.7730 with the RBA decision/rhetoric having little real impact. USDCAD retreated to 1.2640 from 1.2700 amid softer USD/firmer oil tones yesterday but equally bounced back on the reversal in both before capping again.

The mighty Shrimpers of Southend make the trip tonight to Cheltenham and will need every ounce of the resilience shown on Saturday to secure another much needed point.

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

Interbank rates: 08.37 GMT

GBPUSD 1.3895

EURUSD 1.2011

EURGBP 0.8643

GBPEUR 1.1567

GBPAUD 1.7912

GBPCAD 1.7607

GBPJPY 148.48

GBPZAR 20.8702

GBPHKD 10.7727

USDJPY 106.85

USDZAR 15.0578

EURJPY 128.37

EURCHF 1.1027

EURHKD 9.3134

AUDUSD 0.7757

USDCAD 1.2673

USDCHF 0.9178

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