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  • Writer's pictureMike Paterson

Softer risk tones notable again

Tuesday 3 August 2021

Seeing softer risk sentiment after US bond yields fell and oil has another wobble and with COVID rearing its ugly head again but everything relative in context right now in the ever fickle world of Forex. JPY and CHF demand notable again. As I mentioned yesterday there's also some interesting options rolling off this week to keep an eye on.

The RBA kept rates and policy on hold and disappointed a few doves who had some potenital easing in their thoughts as I've mentioned before here but tapering plans unchanged at this time. Speculation will grow of course into the next meeting but for now we've seen a sharp-ish spike in AUD pairs. Bank of England offer their latest thoughts from the MPC on Thursday.

Patience and discipline in trading are key as ever and not being greedy even with some greater levels of intra-day volatility returning. Still some good two-way pips to be had as the jury remains out so picking your moments and levels are more important than ever.

GBPUSD: 1.3870-80 still providing a decent base in the retreats and pips banked per my tweets but 1.3930-50 area still a decent top amid the variable risk tones at the moment. I remain a rally seller overall while keeping an eye on EURGBP and GBPJPY as always.EURGBP: Capped at 0.8550 still and looking to test 0.8530 as I type which is helping to underpin GBPUSD. GBPJPY: That old line at 152.20 now providing good resistance amid the softer risk tones but holding 151.50-60 so far and also helping to support GBPUSD.

I remain a GBP rally seller across the pairs but being patient as ever. These are risk sentiment markets and ever fickle so good/tight position management essential.

EURUSD: 1.1865 providing a good base now ahead of the large option interest at 1.1850 this week, including today.USDJPY: 109.50 now providing a good cap amid the general USD supply/JPY risk-off demand but support at 109.00 still amid dip demand as we continue to range tightly. EURJPY: 130.00 now providing resistance after faling through amid softer risk tones and general EUR supply but 129.50-60 holding so far.USDCHF: Capping at 0.9060 amid softer USD tones and EURCHF supply but holding 0.9030-40 with the SNB always keeping an eye on matters. EURCHF: 1.0740 now appears to be the latest line in the sand this time amid the generally softer EUR tone and CHF demand with SNB shadow ever present but sellers still poised.

AUDUSD: Capping above 0.7400 again after the RBA-led spike from 0.7360 but finding support at 0.7385-90 in the retreat.USDCAD: Finding good support/demand at 1.2460 amid softer oil and risk tones (CADJPY selling) but capping above 1.2520 with large option interest at 1.2480 today casting a shadow still.

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

Interbank rates: 08.32 BST

GBPUSD 1.3912

EURUSD 1.1881

EURGBP 0.8538

GBPEUR 1.1710

GBPJPY 151.93

GBPZAR 19.9387

GBPCAD 1.7405

GBPHKD 10.7860

USDJPY 109.20

USDZAR 14.3249

EURJPY 129.72

EURCHF 1.0749

EURHKD 9.2109

AUDUSD 0.7401

USDCAD 1.2502

USDCHF 0.9047

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