All aboard the rollercoaster ride
Wednesday 30 March 2022
Yesterday saw some headlines about Russian withdrawal from around Kyiv and the market went into happy-clappy mode which saw equities rally strongly as oil, gold and other commodities fell sharply as did the Greenback with the Euro a major beneficiary. Then came the reality check of maybe the Russians were just buying some time to re-position and we saw a reversal per these ever-fickle markets.
The US 2 and 10 year bond yields spread went close into inverse territory which signals an impending recession while JPY pairs found themselves in a lively ride amid some year-end flows as the roller-coaster continued iuts journey. EURUSD still has some large option interest to keep in mind but yesterday's rally has put the 1.1000 contracts out of reach in theory.
GBPUSD: Found a base into 1.3050 in yesterday's early retreat. Re-sells made into the 1.3150-60 rally. I remain a rally seller overall while keeping an eye on EURGBP and GBPJPY as always. EURGBP: Another decent move yesterday amid the EUR feel-good demand to test 7 Feb highs of 0.8478 further helping to cap GBPUSD. Jury still out up there so some two-way business/consolidation expected but demand coming in at 0.8450-60.GBPJPY: Finding support at 159.00 in the extended retreat in Asia as JPY demand returned but now struggling to hold over 160.00.
EURUSD: A good hold of 1.0980 as those 1.1000 options contained the range but then it was up, up and away to 1.1137 on the Russian withdrawal news and general EUR demand. USDJPY: Caution still required whichever side you're playing right now after yesterday's fun and games and the exteded dip into 121.30 in Asia. Year-end flows in play with Yen repatriation to help cap but importers needing to buy some USD too as I've been warning. EURJPY: Support now at 135.00 after yesterday's failure at 136.50 but contained for the moment as core pairs find good two-way interest and some general EUR demand prevails.USDCHF: Support at 0.9325-30 now history amid the general USD retreat this time with EURCHF running out of steam and the general EURUSD buying. SNB shadow lurking amid the fragile backdrop. Sellers still poised. EURCHF: Support/bids at 1.0300 now with SNB lurking in the dips after the 1.0380 rally sellers prevailied with USDCHF retreat outstripping EURUSD rally in the end.
AUDUSD: Another retreat yesterday amid some general commodity-ccy supply but a good hold of 0.7450 this time and capping at 0.7535 so far in the rally.USDCAD: Holding 1.2470-75 again in the latest retreat after a cap at 1.2530 this time as I warned here yesterday as oil rallies off its lows. Two-way business still expected amid all the uncertainty. Options interest in play too.
As we look at trading opportunities it's even more important not to over analyze but trade the price action with discipline and patience. I can help with this in my 1-2-1 sessions and now is the time, more than ever, to get on board with those if you haven't already done so. Contact me to take advantage of currently reduced prices.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.11 BST