USD longs cutting back a little ahead of US inauguration and Trump media press conference

Aside from the broad-based GBP sales emanating from the PM May’s interview on the weekend, we saw USD weakness starting to spread across the board, with the JPY proving the notable gainer.  President elect Trump is set to be inaugurated next week, ahead of which he has schedule a media press conference which is set to be ‘unscripted’.  On this basis alone, we can expect to see some of the major pairings relinquishing gains, with USD/JPY already running into a wall ahead of 119.00 either side of the near year. 

EUR/USD marginally extended the mid 1.0300 lows over this period, and a series of higher lows suggest some more correction on the upside, if only to 1.0700-1.0800.  It is a different story for Cable as the prospect of Article 50 being triggered by end March continues to spark a GBP selling spree at any opportunity. Once again, it has been an interview by PM May which has caused a sell-off in the Pound.  Access to the single market remains a major concern, and with the market assuming there will be a greater focus on border control, the perception has swung towards a ‘hard Brexit’ despite negotiations some way off.

EUR/GBP has pressed up into the offers ahead of .8700, which as yet are unyielding but which should remain pressured into the North American session ahead.  GBP/JPY sales have featured also, falling from near 144.00 in late Asia to 15 ticks shy of 141.00 as yet. Interesting price action in USD/CAD, where USD sales have resumed on a modest upturn despite a pullback in Oil prices. Jobs and trade figures of late have been on the encouraging side in Canada, so we are seeing some potential resilience developing here, as well as the potential impact of the cyclical tailwind effect from the upturn in US economic growth. AUD and NZD have been non-committal in today’s trade, but are coming up against some key resistance levels – the latter struggling above .7000.