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  • Mike Paterson

All aboard the roller coaster ride again

Thursday 7 July 2022

Where to start? EUR still in retreat over Russian gas supplies and ECB uncertainty, and now Boris Johnson finally stepping down in breaking news after 55 Ministers/officals resigned and urging him to go and a roller coaster risk ride. In theory he will remain PM until a new party leader is decided in the Autumn per my earlier tweet.

A small GBP rally on the Johnson news as I type but the political uncertainty will continue to weigh on GBP. For the moment markets are working on the basis of a replacement being positive but there's bigger fish to fry for the UK economy with impending recession weighing heavily. Not to mention a crippled government until the Autumn.

Be ready with your preferred levels/strategy, place orders and let the algos do the heavy work. Discipline is key as always but equally hesitation can often ruin a great idea.

GBPUSD: Another solid retreat yesterda and a test of 1.1875 amid USD demand overall but later falls tempered by EURGBP fall and GBPJPY demand returning amid better risk tones later in the day. I remain poised to sell rallies. Timing as ever is crucial.Decent cap now at 1.1980-00. EURGBP: A cap this time at 0.8560 as the Euro sell-off continues and now down testing 0.8515-20. Jury remains out and plenty of second-guessing of the ECB and BOE still. I still think we'll see two-way pips overall. GBPJPY: Held 160.40-50 yesterday as the soggy risk tones turned firmer and a decent rally helping to underpin GBPUSD but capping at 163.25-30 as the jury remains out. I think the variable sentiment will help provide good two-way pips still for the moment.

EURUSD: Capped into 1.0275 this as the retreat continues further amid the general EUR supply to test 1.0160. Ukraine, Russian gas supplies and ECB remain the elephants in the room. USDJPY: A hold of 135.00 a couple of times and then 135.50 to provide a better risk/firmer USD scenario to post 136.20 as I type with dip demand still being seen for the moment. EURJPY: Lows of 137.30 amid the general EUR supply and softer risk tones but a decent rally to test 139.00 on the renewed better risk JPY supply.. Rally sellers poised still when sentiment turns softer. USDCHF: Support at 0.9675-80 now as EURUSD retreats but EURCHF slide tempering gains and capping at 0.9750 so far. Jury remains out on SNB and amid variable risk but CHF still in demand as further tightening expected. EURCHF: A further retreat to 0.9873 amid the softer risk and EUR supply double-whammy but back above 0.9900 as I type. Maybe witnessing some SNB support but sellers will remain poised still as I've been warning.

AUDUSD: Another retreat to test 0.6750-60 amid yesterday's AUDJPY supply and wobbly metals price and subsequent firmer-risk rally capped around 0.6825 again as I type. GBPAUD currently trading 1.7450-1.7600. NZDUSD in another retreat yesterday but forming a base around 0.6150 but sellers poised into 0.6200.USDCAD: Another cap around 1.3075 as oil price rises off lows and risk turns better but holding 1.2990-00 so far in the retreat although sellers still poised amid the fragile/fickle moves.

Let's continue to be careful out there.

Interbank rates: 08.52 BST

GBPUSD 1.1980

EURUSD 1.0203

EURGBP 0.8523

GBPEUR 1.1730

GBPJPY 162.85

GBPCAD 1.5585

GBPCHF 1.1654

GBPZAR 20.1278

GBPHKD 9.3324

USDJPY 136.07

EURJPY 138.87

EURCHF 0.9900

EURHKD 7.9560

AUDUSD 0.6820

USDCAD 1.2995

USDCHF 0.9700

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