Tuesday 5 January 2021
Yesterday I noted that we were starting to see some change in sentiment as I finished my update and so it proved with some reality-check reversals in FX pairs, notably GBP, but also in Bitcoin,equities and oil.
Some good two-way business to be had though and interesting that BTC turned back up from its rapidly found lows while sentiment elsewhere generally remained soggy. I said to focus on price action as always rather than over analayze and I hope, along with my tweets that you were able to take advantage of some of the moves.
There's little doubt that we live in strange times with the UK now belatedly back in full national lockdown and rationale was thrown out the window a long time ago generally around the globe 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.
GBPUSD duly capped at the significant 1.3700 area amid the firmer USD and softer risk tones and we've seen lows of 1.3542 just ahead of key support at 1.3530-35 before bouncing only to fail at.EURGBP made its way through 0.9000 after gathering more bids once 0.8985 broke and GBPUSD fell further and we've seen highs of 0.9055 (GBPEUR down to 1.1043 from 1.1145).GBPJPY failed at 140.80 on the softer GBP/risk tones and now testing 139.50 as I type with USDJPY once again running into rally sellers amid the fragile risk tones.
I still have a naturally bearish stance on GBP overall and remain poised to sell into rallies but respecting the current vagaries for the moment. No currency is an island.
USDJPY failed into 103.30 again and now testing support at 102.80 again amid the softer USD/risk combo while EURJPY held 126.00 again but failed into 127.00 and still providing good two-way business.EURUSD duly held the key 1.2230-40 suppport area again but failing above 1.2285 for the moment amid softer risk tones. USDCHF duly held 0.8785 with the SNB ever watchful but has also failed at 0.8820 on softer risk tones as EURCHF dips to test 1.0780.
AUDUSD has now found a base at 0.7650 again on its latest retreat and back above 0.7700 again in what seems to be a 0.7650-0.7750 range for the moment.USDCAD capped this time at 1.2780 after holding at 1.2670 with oil prices/risk softer and has fallen to test 1.2730 as I type on the general USD supply again.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.15 GMT