US Dollar demand prevailing

Tuesday 4 May 2021

After the underpinnng of core FX pairs on better risk sentiment we've seen a clear move back into the US Dollar on higher US bond yields after some selling yesterday during the US session on the weaker ISM data but we're ranging still overall as the European session gets fully underway,

The RBA has left rates and policy on hold but with a firm nod to July's meeting for looking at controlling the yield curve focus.Equities generallY remain underpinned but Bitcoin has retreated after posting a strong rally to 59000. Meanwhile Japanese and Chinese markets remain closed for holidays until Thursday. Also on Thursday we have the latest BOE decision casting a shadow too.

Jury still definitely out on the Greenback so, as always in these fickle times, be careful with your trading. Pick your preferred entry/exit levels and don't be greedy or over-analyze. Patience a virtue too of course.

GBPUSD: Another good cap at 1.3920 yesterday but equally a solid hold so far of 1.3850 this time so far. EURGBP selling this morning helping to underpin.

EURGBP: Finding a cap now at 0.8680-00 again and testing 0.8650 as the EURUSD retreat outstrips GBPUSD.

GBPJPY: Rally sellers at 152.00 prevailing atm but underpinned at 151.50 now with more support into 151.30.

I remain a GBP rally seller across the pairs but still not getting over greedy with expectation on the retreats. Caution advised still as equally a case for buying dips still atm.

EURUSD: 1.2075-80 providing a cap this time but dip demand into 1.2000 expected still. A few options in play over the next few days too.USDJPY: 109.70 providing a cap yesterday but equally finding good dip demand around 109.00. EURJPY: A decent retreat from 132.20 yesterday as both core pairs found rally sellers but holding 131.40 again as I type.USDCHF: Holding 0.9100 now as EURUSD retreats but rallies still tempered by EURCHF supply above 1.1000 but with the SNB ever watchful and ready to help. I prefer still to be a dip buyer on both pairs.EURCHF: Holding 1.0960 so far but equally failing at 1.1000

AUDUSD: Capped around 0.7760 again amid the USD demand but still finding support at 0.7700-10 post-RBA helped by the AUDJPY demand between 84.20-40. USDCAD: A good hold of 1.2265-70 again and on its way to test 1.2320 once more amid the fimer USD tones. Large options tomorrow at 1.2300 helping to contain.

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

Interbank rates: 08.37 BST

GBPUSD 1.3863

EURUSD 1.2014

EURGBP 0.8666

GBPEUR 1.1537

GBPAUD 1.7955

GBPCAD 1.7066

GBPJPY 151.70

GBPZAR 20.0749

GBPHKD 10.7534

USDJPY 109.43