Friday 26 November 2021
Cue the obvious Black Friday puns....I've been warning for a while amid all the recent happy-clappy risk-on sentiment that it's "a fragile world out there still" and as Asian trading unfolded we've seen a sharp fall in equities, oil and bond yields with gold rising to test 1800 amid fears of the new COVID variant coming out of Africa.
US markets are partly closed today for the Thanksgiving long week-end but we've had our answer already as to whether we were due a bit of a snooze-fest or that the lesser liquidity might produce a bit of action.
We're seeing further extension of the losses as European trading gets underway so the question now remains of how far this correction/reality check can continue. We don't need long memories to remember that the last COVID related wobble was extensive but soon reversed. As always, don't over-analyze but keep your focus on price action in core and cross-pairs and recent ranges to see whether we hold or break.
GBPUSD: Fresh 11-month lows of 1.3288 as I type and pips gratefully banked again in the retreat per my tweet but failing around 1.3330 yesterday in the limited rally yesterday. The pair now pushed lower by GBPJPY and some EURGBP demand after breaking up through recent 0.8435 highs. GBPUSD rally sellers, including me, ever poised.
EURGBP: A break up through the recent range-high 0.8435 triggering stops amid the general EUR funding-currency demand and now testing 0.8460 helping to push GBPUSD lower. GBPJPY: That 153.50-60 support I was highlighting is now history as the key risk-off pair once again gets slapped by algos and hedge-funds underming the Pound overall as JPY demand returns and USDJPY falls.
I remain a GBP rally seller across the pairs overall as my preferred trading side but being patient as ever. These markets are ever-fickle so good/tight position management essential.
EURUSD: Support/bids now at 1.1200 with those sellers poised between 1.1230-50 now history amid the EUR funding-currency/safe-haven demand. USDJPY: The stonger 115.50 offers/res I mentioned yesterday did indeed cap the rally and now lows posted of 113.67 amid the COVID risk-off panic before a sharp bounce to 114.30 as I type. EURJPY: Those rally sellers poised into 129.50-60 that I noted did indeed prevail but some demand into 128.00 as the Euro finds support of its own. USDCHF: Support now coming in at 0.9260 after failing at 0.9360 on the general USD supply helped by EURCHF falling below 1.0450 but with the SNB ever vigilant. EURCHF: The bigger 1.0450 line still in play despite a brief break lower to 1.0440 with SNB shadow lurking after the continued retreat from 1.0480.
AUDUSD: 0.7180 support noew broken amid the AUDJPY supply with commodity currencies generally getting a risk-off hit. I warned yesterday that sellers were poised 0.7200-10 and so it proved. USDCAD: 1.2640 continued to provide support but now capping at 1.2775-80 after the strong risk-off CADJPY buying-led rally with oil tumbling.
A tough trip north for the beleagured Shrimpers of Southend United and their loyal/crazy supporters tomorrow. Here's hoping we can bring back some early festive joy.....
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Have a great week-end.
Interbank rates: 07.36 GMT
GBPUSD 1.3300
EURUSD 1.1234
EURGBP 0.8446
GBPEUR 1.1839
GBPJPY 152.08
GBPCAD 1.6944
GBPZAR 21.6912
GBPHKD 10.3607
USDJPY 114.35
EURJPY 128.42
EURCHF 1.0452
EURHKD 8.7506
AUDUSD 0.7127
USDCAD 1.2738
USDCHF 0.9306
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