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  • Mike Paterson

All aboard the 2023 rollercoaster ride.

Wednesday 4 January 2023

A lively start to the New Year and after yesterday's Greenback rally, we've now seen a complete reversal, and more in some cases, as the sellers return. In between we've seen some good two-way business but discipline in trading required for new and old traders alike. Some USD demand returning as I get halfway through this update.


One of the stand-outs has been AUD which was already trading higher as a China proxy then boosted by headlines that the NDRC is contemplating a partial end to the coal import ban from Australia. Cue strong AUD buying amid generally softer USD tones too. Elsewhere,Japan conducted a fourth day of unscheduled bond buying.Equity markets are firmer too but oil prices off their Asian highs again. Gold is off its $1865 highs but looking underpinned still.


Later today the FOMC Minutes and US ISM manufacturing data will keep markets second-guessing.


GBPUSD: Good two-way business with 1.1950-1.2050 range after yesterday's hold of 1.1900 but now breaking higher as I type to test 1.12080-00 offers/resistance. I remain poised to re=sell per ongoing strategy. EURGBP: Holding the old support of 0.8780 after capping above 0.8860 resistance. Ranging since as core pairs both rally. GBPJPY: 157.50 now proving a decent resistance area despite some firmer risk tones after holding 155.40 in yesterday's extended retreat, as GBPUSD rally outstripped USDJPY retreat.


EURUSD: The 1.0640-60 area now capping latest rallies as some USD demand returns as I type. Mixed PMI data. Rinse n repeat still while we continue to range. Don't over think it. USDJPY: 131.50 capping in the extended rally before retreating and holding 130.00. I prefer the rally-sell side still overall. EURJPY: Rally sellers still poised 138.50-00 with buyers 137.50-75 as core pairs make their mind up. USDCHF: A decent retreat from 0.9360 to test 0.9250-60 amid the softer USD tones and EURCHF retreat too this time as CHF demand prevails again and EZ PMI data jury out. EURCHF: Still clinging onto 0.9840 (just) in the retreat after failure above 0.9880 again as core pairs both retreat amid the current uncertainty. Good two-way pips still.


AUDUSD: Good support around the 0.6760-80 area now back in place and testing 0.6880 amid the USD supply and China news double-whammy per my opening comments. I remain a rally seller overall. GBPAUD now holding 1.7550 so far in the latest retreat as GBPUSD retreat outstrips AUDUSD again amid the general AUD demand. NZDUSD capping into 0.6350-60 again as I type after holding 0.6260-80 then 0.6300 amid the USD supply. GBPNZD still 1.9000-1.9200 for the moment. USDCAD: Testing 1.3550 in the retreat from 1.3660 amid the USD supply but fall tempered by softer oil tones. Bids building down at 1.3520 still. Expect more two-way business overall.


Let's continue to be careful out there.

Interbank rates: 08.22 GMT

GBPUSD 1.2070

EURUSD 1.0616

EURGBP 0.8800

GBPEUR 1.1360

GBPJPY 157.03

GBPCAD 1.6354

GBPCHF 1.1187

GBPZAR 20.2957

GBPHKD 9.4025

USDJPY 130.10

EURJPY 138.15

EURCHF 0.9839

EURHKD 8.2768

AUDUSD 0.6867

NZDUSD 0.6342

USDCAD 1.3584

USDCHF 0.9265



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