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  • Writer's pictureMike Paterson

US Dollar demand and Pound in retreat as another week closes

Friday 18 December 2020

Yes folks it's Friday again, coming round so soon again after a busy week,and we're seeing some USD demand with a bit of help from the 08.00 algo this morning. I warned on Twitter and here after the Fed meeting that the Greenback wasn't a one-way ticket with other CBs in very much the same compromised position. Pound in retreat again as I type this report.

Lots of good two-way business therefore in the past 24 hours, not least of which in Pound pairs with the BOE delivering nothing as expected but Brexit headlines once again dominating the scene. Sunday now seems to be latest deadline day but we know that's never written in stone. COVID is still casting its sad shadow and risk sentiment continues to hold firm with equities and oil still underpinned on hopes of greater injection of liquidity by and large.

GBPUSD duly found a decent cap between 1.3620-30 per my tweets then cue a steady fall through the previous 1.3550 resistance to post lows of 1.3513 but not without some good two-way business along the way to suit both bulls and bears.Still on the retreat through 1.3500 as I finish this update. EURGBP duly held 0.8980 (GBPEUR capped at 1.1135) which I was banging on about on Twitter then 0.9000 before finally breaking back up through the 0.9040 resistance/offers as GBP fell.Now testing 0.9080 (1.1020) as I type.GBPJPY found good support at 139.50 again on the firmer risk/GBP double whammy but then failed at 140.50 in the reverse GBP move.

Patience continues to be a virtue and rally-selling in GBPUSD can still bring reward but entry level key as always. Definitely still finding some dip demand so equally a case for going long in the dips too as I've mentioned for a while now. Brexit still the large elephant in the room.

USDJPY held 102.85 helped by some support on JPY selling as I highlighted yesterday and now back up testing 103.60 helped this morning by the 08.00 GMT algo. EURJPY remains tightly bound but underpinned at 126.00 and now 126.40 amid USD and cross flows.EURUSD held technical 1.2200-10 support this time around and broke up through key resistance at 1.2250 amid some USD supply and general EUR demand but capping into 1.2280. We have large option expiries today at 1.2250 helping to contain. USDCHF has held 0.8825-30 again as USD demand returns and EURCHF remains underpinned with the SNB still ever watchful as they said again yesterday.

AUDUSD remains underpinned now at 0.7575-80 but failing at 0.7640 as USD demand returns and now back down through 0.7600. USDCAD has held 1.2680 and enjoying the USD demand to post 1.2760 but tempered by firm oil price still.

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

Tomorrow the currently mighty Shrimpers of Southend United look to keep their current run of form going at Mansfield. Every point counts now.

Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a great week-end one and all.

Interbank rates: 08.40 GMT

GBPUSD 1.3540

EURUSD 1.2255

EURGBP 0.9047

GBPEUR 1.1051

GBPAUD 1.7802

GBPCAD 1.7258

GBPJPY 140.22

GBPZAR 19.7098

GBPHKD 10.4821

USDJPY 103.50

USDZAR 14.6195

EURJPY 126.86

EURCHF 1.0847

EURHKD 9.4852

AUDUSD 0.7609

USDCAD 1.2741

USDCHF 0.8851

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