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  • Writer's pictureMike Paterson

US Dollar supply still playing out as another week closes.

Friday 19 February 2021

Some retreat in equities and oil brings variable risk sentiment and softer USD tones as we head into the week-end. The Pound continues to look underpinned but rally sellers poised still and already seeing GBPJPY in retreat amid softer risk and USDJPY falling back while EURGBP is a little higher with the Euro feeling some love again helped by better German PMI data. UK Services PMI just out also helping to underpin GBP.

The Forex jury is ever-fickle amid all the noise and sentiment can turn quickly as I keep repeating and we've seen some good two-way business again in the past 24 hours so keep playing the price action in front of you, pick your entry/exit levels carefully and don't over analyze or assume anything. Oh, and don't get greedy still...!

GBPUSD yesterday found a decent base at 1.3880 then 1.3920 and now looks destined to test 1.4000 amid the softer USD tones.We can expect some sellers up there but equally we should expect dip demand as I've been warning for a while.

EURGBP found some support at 0.8640 and since been back above 0.8670 as the Euro finds some favour generally but sellers remain poised. GBPJPY found a decent cap at 147.80 after breaking up through 147.00-20 with some softer risk bringing JPY demand and USDJPY in retreat.

I remain poised to sell into rallies as a jobbing preference but respecting dip demand still with price action ever fickle. Equally a case still for going long in the dips therefore as we continue to range. Patience and not getting greedy remain key.

USDJPY has broken back down through 105.50 suppport amid the general USD supply this morning but holding 105.30 for the moment. EURJPY now has dip demand at 127.60 but 128.00 proving a step too far as I type. EURUSD has found some support again helped by the softer USD tones after looking soggy earlier in the week and now higher again at 1.2135 after holding 1.2080. USDCHF found a good cap at 0.8980 this time and has been down to test 0.8930 as EURUSD rallies with EURCHF also underpinned amid the SNB ever watchful/helpful.

AUDUSD found support at the key 0.7750-60 area this time and now finally cleared 0.7800 to test 0.7850 as USD selling prevails and metal prices remain firm. USDCAD yesterday rallied strongly helped by softer oil prices and tested 1.2730 before retreating to 1.2645 this morning as the USD supply continues and oil price steadies.

Tomorrow sees the mighty Shrimpers return to the hallowed Hall on the back of two impressive away trips and fingers crossed the current good run can extend further as we claw our way off the bottom the table.

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

Interbank rates: 08.20 GMT

GBPUSD 1.3974

EURUSD 1.2111

EURGBP 0.8665

GBPEUR 1.1539

GBPAUD 1.7917

GBPCAD 1.7732

GBPJPY 147.52

GBPZAR 20.3933

GBPHKD 10.8340

USDJPY 105.56

USDZAR 14.5875

EURJPY 127.83

EURCHF 1.0841

EURHKD 9.3915

AUDUSD 0.7800

USDCAD 1.2685

USDCHF 0.8953

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