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  • Mike Paterson

All change after US ISM data print

Monday 9 January 2023

We've seen USD sellers return to the fore after US NFP showed some jobs growth but with softer wages then it was the very soggy ISM Services data that set the algos racing. Cue USD supply, and that has continued through Asia into early European trading as the rollercoaster start to 2023 continues. Data focus now turns to the latest US CPI reading on Thursday.

Oil prices fell into in the European close on Friday but have since traded higher. Equity prices have rallied strongly again as the FOMC pivot speculation returns despite Powell's recent denials. Gold needed no excuse to push higher to post $1881 now.

China are continuing with their re-opening boost plans giving some support but I remain cynical amid the rapidly rising COVID cases, and Ukraine/Russia war continues to be the elephant in the room amid other geopolitical risk such as the protests in Brazil yesterday.

GBPUSD: A good hold of the 1.1830-50 support area I highlighted in my update on Friday. I remain poised to re=sell per ongoing strategy but caution advised for the moment as we wait to see the extent of this reversal on the week ahead. EURGBP: The 0.8820 support area now broken as GBPUSD finds some legs again anc triggering a few stops after capping above 0.8860 again. Ranging still as core pairs make their mind up but now testing 0.8775-80 support as I type. GBPJPY: 159.50 proving a decent support area again after the hold of 159.00 on the GBPUSD extended rally and better risk tones but jury remains out as we now test 161.00

EURUSD: A solid hold of 1.0480 in Friday's retreat and a solid rally post ISM to now look at 1.0700 with a base forming at 1.0600 and 1.0650 along the way. USDJPY: Holding 131.30 in the USD sell-off retreat so far. EURJPY: We've been up to test 141.35 again amid the better risk tones after a good hold of 140.50. Looks underpinned still but these markets are ever-fragile.USDCHF: CHF demand notable again with EURCHF retreating too and a solid fall in this pair to look at that 0.9220 support area amid the softer USD tones too. SNB will be watching closely still both sides of the price. EURCHF: Support at 0.98350 holding so far after the retreat from 0.990 amid some CHF supply returning as USDCHF retreat outstrips EURUSD rally. Good two-way pips still overall as we continue to range.

AUDUSD: Good support returning at 0.6760 after the solid hold of 0.6725-30 and a strong rally triggering stops along the way to post 0.6947 highs amid the USD sell-off. Still Keep an eye on AUD crosses for further clues. NZDUSD: 0.6260 resistance broken on the way back up triggering stops and now support coming in at 0.6350 after failing aobve 0.6400. USDCAD: Solid retreat from 1.3650 amid the softer USD tones and now given some extra momentum as oil prices rally off their lows too..Expect more two-way business overall

Let's continue to be careful out there.

Interbank rates: 08.15 GMT

GBPUSD 1.2162

EURUSD 1.0685

EURGBP 0.8800

GBPEUR 1.1362

GBPJPY 160.50

GBPCAD 1.6282

GBPCHF 1.1236

GBPZAR 20.7300

GBPHKD 9.4726

USDJPY 132.17

EURJPY 141.24

EURCHF 0.9857

EURHKD 8.3370

AUDUSD 0.6930

NZDUSD 0.6394

USDCAD 1.3400

USDCHF 0.9228

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