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  • Writer's pictureMike Paterson

USD demand, Pound under pressure as this key week gets underway

Monday 2 November 2020

A new week and new month are greeted by ongoing fragile risk sentiment with some USD support ahead of tomorrow's US election and Pound under pressure as England prepares for another full lockdown this Thursday which also sees the latest BOE decision on the same day.

GBPUSD currently in retreat again to test 1.2850 after capping at 1.2920 following the Asia opening gap lower. UK manufacturing PMI data better than expected and helping a bounce to 1.2900 as I finish this report. EURGBP has had its own roller coaster ride again but found support below 0.9000 once more helped today by EUR 1.5bln expiries today but failing at 0.9050 as I type.More sellers poised at 0.9080 and 0.9100. BBuyers poised now at 0.9025-30 again then 0.9010 ahead of those large 0.9000 expiries, (mostly Puts). I remain a dip buyer overall while respecting the current two-way business still.

No change in my basic view and I stay poised to sell GBP rallies as my preferred side and buy back in the dips as ever. Patience continues to be a virtue and entry level key as always. I still see dip demand though with markets and risk sentiment still in a state of uncertainty overall.Brexit remains the very big elephant in the room and the negative impact of COVID still undermining.

USDJPY remains range bound amid the variable risk and USD tones after holding 104.25-30 on Friday. Still capping around 105.00 though. EURJPY found a cap into the pivotal 122.50 area again amid the softer risk but holding 121.75-80 again on the retreat. EURUSD continues its retreat from 1.1700 amid the USD demand and now testing 1.1625-30 support. I remain a rally seller overall.USDCHF has based at 0.9150 this time on the EURUSD retreat but failing into 0.9200 on the rally with EURUSD finding some dip demand this morning and EURCHF on back foot but SNB casting its shadow still.

AUDUSD has retreated again, this time from 0.7050 to post lows of 0.6992 this morning but finding some dip demand with option expiry interest at 0.7000 per my earlier tweet. USDCAD remains underpinned amid the firmer USD/softer oil tones and dovish BOC but failed around 1.3350 this time but holding 1.3300 in the latest retreat.

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

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

Interbank rates:  08.07 GMT

GBPUSD   1.2889

EURUSD   1.1633

EURGBP   0.9025

GBPEUR   1.1077

GBPAUD   1.8384

GBPCAD   1.7170

GBPJPY   135.12

GBPZAR   20.9680

GBPHKD   9.9898

USDJPY   104.85

USDZAR   16.2685

EURJPY   121.97

EURCHF   1.0673

EURHKD   9.0185

AUDUSD   0.7010

USDCAD   1.3324

USDCHF   0.9174

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