• Risk-on sentiment still prevailing but jury out

    More of the same as we see large moves higher in Yen pairs as USDJPY surges up through 108.00, and USDCHF remains bid and that's underpinning core pairs too. Oil prices higher as are equities to keep the risk-on sentiment prevailing.

    I still don't really get it but markets are what markets do and ours is not to reason why. If the mood of optimism over COVID is the driver then we wait to see if that's justified amid all the other global fragility but for now we can simply go with the flow or stand back. Trying to second-guess when it might turn round is dangerous still for the moment but I stand poised.

    GBPUSD found itself ranging between 1.2530-60 after failing into the decent techincal level at 1.2575 as EURGBP bounced up and down between 0.8900-20 per my tweets. I hope the steer helped. Seen some further GBPJPY buying take it up through 1.2600 to post 1.2612 but lower again now at 1.2573.EURGBP failed at 0.8920 multiple times on its bounce from 0.8865 but held 0.8900 but we've broken down to look at 0.8880 only to rebound again as GBPUSD fails above 1.2600 and EURUSD gets through 1.1200.GBPJPY took off yesterday amid the risk-on sentiment then accelerated to 137.00 as USDJPY broke up through 108.00 triggering stops through 108.20 and 108.50 to post 108.85 so far.

    I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. Still no need to stand in the way of a truck hurtling at speed so my trading size remains smaller and cautious. Better than expected/flask UK Services PMI just released saw a small rally in GBP which was beginning to retreat prior but gains limited for the moment given there will be worse data to come amid all the lockdown inactivity.

    USDJPY finally broke up through 108.00 triggering some short-position bail-outs given the surge through 108.20 and beyond to 108.85 as someone turned on the risk-on Yen sell button. I had been highlighting the dip demand at 107.50 and 107.30 and noted its reluctance to go lower amid the general supposed USD supply so I hope the steer helped. EURJPY surged on the Yen selling and underpinned EURUSD therefore but capped so far around 122.00.

    EURUSD found itself underpinned at 1.1160 after breaking up through 1.1150 and posted 1.1228 on the USD supply/EURJPY demand double whammy. Large option expiries between 1.1210-20 today and helping to contain range.

    USDCHF found support again at 0.9600 as EURCHF rallied to 1.0800 on the better risk/SNB helping hand combo.Still expect SNB in the dips.

    AUDUSD got another lift in early Asia with some large AUDJPY demand in thin trading liquidity to surge through 0.6900 and post 0.6984 but retreating back to 0.6895 as I type and some pips from rally sells gratefully banked. Perhaps China's shadow not being totally ignored at the moment after all.

    USDCAD has been down to look at 1.3480 amid the softer Greenback and better risk/firmer oil combo with CADJPY demand notable too again but some bounce since.

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

    Twitter: @MSPFX and @MikePatersonFX

    Interbank rates: 08.42 BST

    GBPUSD 1.2577

    EURUSD 1.1210

    EURGBP 0.8912

    GBPEUR 1.1219

    GBPAUD 1.8161

    GBPCAD 1.6984

    GBPJPY 136.79

    GBPZAR 21.4331

    GBPHKD 9.7510

    USDJPY 108.77

    USDZAR 17.0457

    EURJPY 121.94

    EURCHF 1.0797

    EURHKD 8.6914

    AUDUSD 0.6923

    USDCAD 1.3505

    USDCHF 0.9630

    Read more...

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  • Pound in positive mood amid all the turmoil.

    Seems my long-held view that the world is a very fragile place is playing out, and some, yet markets are taking the view that the glass is definitely half-full and the various unwindings of COVID 19 lockdown are bringing renewed optimism.

    Meanwhile the rioting on the streets of the US has got Trump promising military action and the general underbelly of discontent has seen some USD supply but somehow risk-sentiment remains to the positive and helping to underpin USDJPY above 107.50 and USDCHF at 0.9580-00 albeit undoubtedly with some help from the SNB. EURUSD has not exactly been racing north either (but is now as I type). Not a complete USD collapse then as I see some commentators stating and the whole picture is, frankly, a bit of a mess at the moment.

    The Pound though has seen a good move higher on the better risk, with various lines of resistance being broken to trigger stops and with reports of the UK being prepared to make Brexit trade talk concessions if the the EU move first also helping to underpin atm.

    GBPUSD found support in the pivotal 1.2380 area and since risen on the softer USD to take out the strong offers/resistance at 1.2420-25, then 1.2450 and 1.2500 before failing around 1.2550 but still looks underpinned as I type. I did warn yesterday that there was still some dip demand to be expected but frankly I didn't see such a rally in the pipeline. We must never assume anything in Forex moves, as I tweeted, and "if in doubt stay out" is a strong mantra of mine.

    EURGBP spent all day retreating on the GBP demand generally and EURUSD failing to rally with any purpose and we've broken down to post lows of 0.8866 in a rush but rallying back to 0.8900 agin as I type.GBPJPY broke up through 133.60 then the stronger 134.00 and 134.60 to test 135.20 amid the GBP strength and better risk sentiment.

    I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. No need to stand in the way of a truck hurtling at speed.

    USDJPY has held 107.50 but equally sellers around 107.80 still. Rinse and repeat for the moment. EURJPY has now broken up above 120.00 after holding 119.50-60 as EURUSD finally decides to break 1.1150 and now testing 120.30 on the better risk. EURUSD is now up through 1.1150 in a rush and posting 1.1170 as USD supply accelerates while USDCHF is giving up a strong line at 0.9600 as I type as EURUSD bursts higher with EURCHF tightly bound around 1.0700. Still expect SNB in the dips though.

    AUDUSD is also still enjoying the USD supply/better risk combo to post new recent highs of 0.6848 with the RBA leaving rates on hold and talking in upbeat tones as expected. China still casting a shadow though.

    USDCAD failed at the strong 1.3730 resistance and has now fallen to test 1.3500 in a fairly straight line amid the softer Greenback and better risk/firmer oil combo with CADJPY demand notable too.

    You don't need me to tell you that there's lots going on right now, and the foreseeable future, so don't forget to get in touch if there's areas of trading these volatile 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.

    Twitter: @MSPFX and @MikePatersonFX

    Interbank rates: 08.44 BST

    GBPUSD 1.2514

    EURUSD 1.1121

    EURGBP 0.8889

    GBPEUR 1.1249

    GBPAUD 1.8400

    GBPCAD 1.6947

    GBPJPY 134.84

    GBPZAR 21.6741

    GBPHKD 9.7021

    USDJPY 107.80

    USDZAR 17.2806

    EURJPY 119.88

    EURCHF 1.0685

    EURHKD 8.6248

    AUDUSD 0.6796

    USDCAD 1.3551

    USDCHF 0.9609

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  • Softer Greenback as a new month gets underway.

    After all the month-end fun and games on which hopefully I gave you a good steer both here and Twitter we've seen a weaker USD in Asia and early Europe but with some degree of risk-on sentiment returning as markets eeemingly shrug off the US-China spat, US riots and COVID 19 fallout. Wrongly in my book and I still see fragile risk-sentiment overall.

    Reports that the OPEC+ oil meeting will be brought forward to 4 June, and some better than expected headline EU manufacturing PMI data out this morning with more to come from the US later today. France, Germany and Switzerland on Whitsun holiday but London fully open.

    Too many ups n down in FX pairs since Friday morning to summarize here but here's the gist.

    GBPUSD found support in the key 1.2280 area after the month-end buying capped at 1.2390 and since risen on the softer USD to test strong offers/resistance at 1.2420 and some re-sells duly placed..Still some dip demand to be expected though but good two-way business to be had again I think. EURGBP failed at 0.9050 (GBPEUR 1.1050) and now down through 0.8980 with GBP demand generally and EURUSD failing at 1.1150.GBPJPY finally broke up through the strong line at 133.00 but has seen good two-way business in a 132.60-133.60 range.

    I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. Brexit trade talk spats with EU still in play.

    USDJPY failed above 107.80 again but support at 107.30 evident again with larger still at 107.00 while EURJPY has been finding more sellers 120.00 and now dipping again below 119.50 on softer risk as Europe gets underway but decent dip demand expected for the moment.EURUSD is failing around 1.1150 after its strong month-end demand and retreat then further rally in Asia but decent demand now at 1.1100.USDCHF failed at 0.9650 and now back through 0.9600 as EURCHF drops back through 1.0700 and that remains a decent resistance area. Still expect SNB in the dips though.

    AUDUSD enjoyed the month-end USD supply and more since to post 0.6773 but falling on another reality check as I type with China still casting a shadow.USDCAD failed above 1.3820 and fallen to test 1.3680 amid the softer Greenback but rallying now to look at 1.3720-30 offers amid the variable oil and risk combo.

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

    Twitter: @MSPFX and @MikePatersonFX

    Interbank rates: 08.35 BST

    GBPUSD 1.2411

    EURUSD 1.1148

    EURGBP 0.8981

    GBPEUR 1.1131

    GBPAUD 1.8344

    GBPCAD 1.6976

    GBPJPY 133.44

    GBPZAR 21,6680

    GBPHKD 9.6222

    USDJPY 107.52

    USDZAR 17.4815

    EURJPY 119.87

    EURCHF 1.0700

    EURHKD 8.6445

    AUDUSD 0.6764

    USDCAD 1.3680

    USDCHF 0.9597

    Read more...

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  • Month-end flows notable with some risk-off sentiment returning too

    Yesterday I warned subsribers about month-end USD supply particularly in GBP and EUR and also warned sbout some front running. Well, we've seen that with the Greenback falling across the board and we can expect more of the same into the 4pm London fix later.Final estimates of month-end hedge rebalancing flows continues to call for USD selling against all major currencies with AUD,CAD and NOK now highlighted too but less notable vs JPY.

    Meanwhile US-China tensions continue to weigh on risk sentiment with Trump expected to make an announcement on the situation later today. Forewarned is forearmed and I've been highlighting fragile risk for a while which is also sending USDJPY lower on the Yen demand so I hope the steer has served you well.

    GBPUSD failed at 1.2280 a couple of times then fell to test the 1.2220-25 bids on some negative news but that was the opportunity to buy back particularly with the month-end demand. The rally from there broke the back of the 1.2280-85 offers and that was another signal not to stand in the way as we tested the larger 1.2350-55 resistance. Re-sells duly placed but still some dip demand to be expected on month-end flows but good two-way pips to be had again meanwhile with EURGBP demand also helping to cap.EURGBP duly held 0.8960 where I noted bids building yesterday and helped by the month-end demand and EURUSD outstripping GBPUSD on the core pair rallies to help the pair up to 0.9048 (GBPEUR down to 1.1051) this morning.GBPJPY failed yet again into 133.00 and falling to 132.00 as I type as risk-off selling dominates the landscape and highlighting the Pound's inherent softness.

    I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. Caution advised as we head into month-end flows still.

    USDJPY duly failed into 107.90 where we had large option expiries and now testing 107.00 on the general USD supply and fragile risk. EURJPY rallied on yesterday's general EUR demand/better risk combo before finding more sellers above 119.30 but decent dip demand since into 118.80. EURUSD had a bid all day and duly accelerated through 1.1080 helped by those stops at 1.1055-65 I higlighted and all on the month-end flows you were warned about and we should expect more today. USDCHF is holding 0.9600 for the moment again as EURCHF breaches 1.0700 on the EUR demand generally with no doubt a little helped from the SNB.

    AUDUSD has enjoyed the month-end USD supply but good two-way business still with China casting its ugly shadow while USDCAD has been contained amid the variable softer USD but also the lower oil and softer risk combo providing some CAD supply.

    Let's continue to be careful out there in all things. Staying safe must be our main priority still. Make sure you get some rest over the week-end.

    Twitter: @MSPFX and @MikePatersonFX

    Interbank rates: 08.45 BST

    GBPUSD 1.2320

    EURUSD 1.1098

    EURGBP 0.9009

    GBPEUR 1.1092

    GBPAUD 1.8495

    GBPCAD 1.6953

    GBPJPY 131.96

    GBPZAR 21.5520

    GBPHKD 9.5517

    USDJPY 107.18

    USDZAR 17.5257

    EURJPY 118.96

    EURCHF 1.0689

    EURHKD 8.6113

    AUDUSD 0.6655

    USDCAD 1.3773

    USDCHF 0.9628

    Read more...

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  • Euro rallies on EU Recovery Fund plans

    e've still got the backdrop of US-China tensions, China-HK, and COVID 19 fallout concerns but yesterday

    saw the Euro grab some headlines as the EU Commission proposed a larger than expected Recovery Fund package of €750bln rather than the previously Merkel-announced €500bln. The new proposals are a mix of €500bln grants and €250bln loans but it all still has to be ratified and already we've heard some dissenting noises.Either way the Euro caught a bid across the board albeit with some reality-check retreats.

    The Pound also saw another wobble on more Brexit talk spats and BOE governor Bailey not ruling out further interest rate cuts.A raft of US data today at 12.30 GMT includes, weekly jobless claims, GDP and Durable Goods and may yet excite the algos if any big surprises.

    GBPUSD fell to test 1.2200-20 on the Brexit/Bailey/firmer EURGBP combo before seeing a rally to look at 1.2280-85 and more re-sells placed as per my earlier tweet.Still some dip demand to be expected on month-end flows but good two-way pips to be had again meanwhile I think. EURGBP duly held 0.8900 helped by those large option expiries and with month-end demand in play as per my udates here then accelerated higher on the bearish GBP/bullish EUR news before failing at 0.9000 ( 1.1110) and that remains a decent EUR cap/GBP support for the moment.GBPJPY failed at 133.00 again and fell to 131.65 as GBP came under attack.Decent rally on since as core pairs both found dip demand but sellers lurking at 132.50 and capping so far.

    I stay poised to sell GBP rallies overall and buy back in the dips as ever but patience continues to be a virtue and entry level key as always. Caution advised as we head into month-end flows though.

    USDJPY duly failed into 108.00 again but finding some dip buyers on the general USD demand. EURJPY rallied on the general EUR demand/better risk combo before finding more sellers around 119.00 but decent dip demand since. EURUSD fell below 1.0950 but held 1.0925-35 where we had that large option interest before finally cracking 1.1000 on the Recovery Fund news but ran into sellers at 1.1030-35 only to retreat below 1.0990 into options expiry time as I tweeted/warned with those large expiries in play. Another rally since but seems 1.1035 a decent line in the sand.

    USDCHF is holding 0.9680 again after we saw a surge on the EURCHF rally helped by more intervention talk from SNB's Jordan. No surprises but it appears they took good dvantage of the EUR demand generally to push EURCHF up to test 1.0700 only to fall back to 1.0630 where there now seems a new line in the sand.

    AUDUSD tried to hold 0.6650 where we had some option expiries but the break below 0.6630 triggered stops as the larger 0.6590-00 expiry interest became the target and duly smashed. Rallies have been limited since but good-two price action still to be had. USDCAD had a decent roller coaster ride of its own amid the variable USD/oil/risk combo and from 1.3730 we failed at 1.3820 only to fall back to from whence it came before another bounce.

    You don't need me to tell you that there's lots going on right now, and the foreseeable future, so don't forget to take advantage of my 1-2-1 mentoring sessions if there's areas of trading these volatile markets or how to make best use of the order boards and expiries, 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.

    Twitter: @MSPFX and @MikePatersonFX

    Interbank rates: 08.15 BST

    GBPUSD 1.2268

    EURUSD 1.1007

    EURGBP 0.8970

    GBPEUR 1.1147

    GBPAUD 1.8555

    GBPCAD 1.6886

    GBPJPY 132.28

    GBPZAR 21.3588

    GBPHKD 9.5129

    USDJPY 107.81

    USDZAR 17.4465

    EURJPY 118.66

    EURCHF 1.0657

    EURHKD 8.5341

    AUDUSD 0.6611

    USDCAD 1.3763

    USDCHF 0.9683

    Read more...

    0 comments

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