• Crisis? What crisis?

    The world remains a very fragile place but markets don't care as risk-on sentiment continues to drive FX pairs amid all the loose money swashing around the system. After a little pause for breath yesterday and what I thought might be start of a reality check proved to be short-lived as equities, commodities and gold surged again. 10-Year US bond yields rallied up through 0.8% adding fuel to the fire.

    The ECB duly announced a large increase in PEPP as I reported yesterday and with Lagarde telling us that the economy had bottomed out but she remained cautious/vague in the presser. Today sees the latest US NFP data which is not the prime mover it used to be given the current climate but will still be closely watched. EU's Barnier also delivering a speech on Brexit talks at 11.00 GMT.

    I have said this week that there's no point standing in front of a truck hurtling at great speed. Markets do not need to be rational so if you don't want to join the happy-clappy party then it's probably wise to stand back.There is still opportunity to be contrarian in your trading but picking the right levels, even with patience, is bringing little reward atm. We're seeing key levels broken, triggering stops to accelerate the momentum and at some point it will all become overdone as traders and algos scramble for cover. What we can't know is when, even if, that might be.

    "Go with the flow" and "the trend is your friend" have been big mantras this week, and of course my own favourite "ours is not to reason why, ours is just to sell and buy". Little point in trying to over analyze at the best of times as I always say but right now it's completely pointless. The current play is, simply, what it is.

    GBPUSD duly held 1.2500 where I pointed out bids were building and we saw some good two-way business albeit with an upside bias before finally breaking 1.2600 again and now posting 1.2690 this morning before retreating as I type.EURGBP enjoyed the post-ECB lovefest but failed above 0.9000 and the retreat helped put a bid under GBPUSD but the reverse currently being seen as we base into 0.8950 (GBPEUR capping at 1.1175). GBPJPY found a base at 136.00 as the ECB presser got underway and enjoyed the risk-on ride to 137.80 with core pair demand adding to the momentum and after holding 137.20 we've scaled heady heights above 138.60 before capping this morning for the moment as some softer risk tones on news out of China re trade talks.

    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. Dip demand still expected.

    USDJPY broke up through 109.00 again to test 109.50 amid the risk-on surge after holding 108.60 but still failing to make much progress amid the general USD supply and fragile backdrop. EURJPY remains underpinned on the better risk/core pair demand but now capped at 124.35 amid that China news/reality check. EURUSD was trying to make its mind up through the ECB announcement and presser but in the absence of any real negative vibe and that large PEPP boost it was the bulls that took control to take the pair up through 1.1280-00 to post 1.1384 before retreating this morning on some slightly softer risk. USDCHF found sellers at 0.9620 as EURUSD exploded higher but holding 0.9550 after a retreat as EURCHF finds dip demand too. SNB still propping up the dips.

    AUDUSD saw another rally helped by some large AUDJPY demand again and we've been up to 0.7013 before reteating amid the softer risk tones as I type. USDCAD failed at 1.3540 and fell to look at 1.3460 amid the firmer oil/risk combo but finding some support again as I type. Jobs/wages data out today at 12.30 GMT and keep an eye out over the weekend for potential OPEC+ meeting.

    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 contact me 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: 08.38 BST

    GBPUSD 1.2678

    EURUSD 1.1357

    EURGBP 0.8956

    GBPEUR 1.1164

    GBPAUD 1.8100

    GBPCAD 1.7069

    GBPJPY 138.65

    USDJPY 109.35

    EURJPY 124.22

    EURCHF 1.0871

    AUDUSD 0.7006

    USDCAD 1.3463

    USDCHF 0.9570

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