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  • Writer's pictureMike Paterson

US Dollar demand still as another month gets underway

Monday 1 October 2018

New month, same story by and large with the Greenback still the best of an average

bunch apart from a surging Canadian $ on the back of a US/Mexico/Canada NAFTA agreement finally being struck revamped as the USMCA.

Plenty of month-end flows on Friday that saw GBPUSD fall to test decent support/demand at 1.3000 before rallying to post highs of 1.3060 which now becomes an immediate line in the sand. Brexit, May and the Tories still featuring in the headlines as their party conference continues. Sellers immediately around 1.3060 then 1.3080 1.3100 and 1.3130 still with more at 1.3150, 1.3180 and 1.3200. Immediate demand now around 1.3020 then larger into 1.3000 then 1.2980 and 1.2950. I remain a GBP rally seller.

I noted again on Friday that EURGBP was notably failing to rally despite the usual month-end Bundesbank demand but the pair held support around 0.8880-85 (GBPEUR resistance 1.1260) before bouncing to hit recent highs of 0.8915 which now becomes decent resistance. Back on the lows this morning amid general Euro supply playing out again.Bids between 0.8875-80 then 0.8860, 0.8830 and 0.8800.Sellers now poised around 0.8900 then 0.8915-20, 0.8935 and 0.8950 still.I remain a dip buyer but remain cautious given the lack of rally strength.

Plenty of UK data out shortly to throw into the scrappy mix.

EURUSD fell to post lows of 1.1570 before also rallying to test 1.1630 but is lower again this morning amid the general US$ demand and Euro supply.Immediate bids/support still at 1.1570, 1.1550, 1.1520 and 1.1500 with sellers poised around 1.1630, 1.1650, 1.1670, 1.1700 then 1.1720 and 1.1740 where large option contract roll off today.

USDJPY has taken full advantage of the USD demand/Yen supply combo and rallied further to take out the next of the barrier option defences at 114.00 this morning. More lurking at 114.50 as the next target for buyers. Bids building now around 113.80, then 113.60 with more between 113.20-30 then 113.00 where large options expire today. USDCHF has also made solid gains again to post highs of 0.9840 but tempered again by some EURCHF selling. Support now around 1.1360, 1.1320 then 1.1300 still. USDCHF bids now at 0.9800, 0.9780, 0.9750 and 0.9730 with sell interest around 0.9860, 0.9880 and 0.9900.

AUDUSD has held the decent support line at 0.7200 that I've been highlighting but remains on the back foot. Sellers now around 0.7250 then 0.7280 and 0.7300 again with immediate demand at 0.7220 then 0.7200 still and 0.7180. USDCAD has tumbled to lows of 1.2812 following the NAFTA/USMCA deal as the Canadian $ breathes a big sigh of relief.Sell interest now building around 1.2860 then 1.2880-1.2900 with buyers initially now at 1.2800, 1.2780 and 1.2750.

Fickle Forex markets ever prevailing, so get your orders in to take full advantage of these moves.

On Saturday the mighty Shrimpers of Southend United travelled to Wycombe and came away with all 3 points despite a scare or two in the last 10 minutes but hey, we never do things the easy way! My focus was also on Le Golf National course just outside Paris  as the Ryder Cup played out. A terrific win for Europe and pound for pound this wonderful sporting occasion remains, for me, the best out there across all sports.

Have a good week out there one and all.

Interbank Rate 08.31 BST GBPUSD   1.3038 EURUSD   1.1583 EURGBP   0.8884 GBPEUR   1.1255 USDJPY   113.98 USDCAD   1.2822 USDCHF   0.9816 GBPAUD   1.8067 GBPCAD   1.6714 GBPCHF   1.2797 GBPZAR   18.4178 GBPHKD   10.1084 EURHKD   8.9812

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