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