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  • Mike Paterson

Another rollercoaster ride

Thursday 19 January 2023

It's been a lively 24 hours with no real rhyme or reason but plenty of volatility in Forex markets in a roller coaster ride, presenting the case clearly for identifying risk/reward levels and not over-analysing as I continuely say. The USD/FOMC jury remains well and truly out.

Equities and WTI oil have been in retreat again while Gold has found support at $1900 again after failing at $1925. Ukraine/Russia war continues to be the elephant in the room amid other geopolitical risk and definite signs of escalation sadly. US Fed Chair Powell has COVID in mild form and not expected to affect any deliberations leading into the 1 Feb policy announcement. NZ PM Arden has stepped down, effective 7 Feb, saying she doesn't have it in her to continue any more.

GBPUSD: Underpinned still overall but lots of good two-way business again whatever you preference and holding 1.2300 well yesterday before a solid ascent to 1.2435 only to fail amid some USD demand returning and retreating to 1.2350. EURGBP: 0.8735 providing decent support yesterday but the rally limited to 0.8775 for the moment with sellers poised 0.8780-00 for the moment. GBPJPY: Finding support at 157.50 now after a cap at 159.00 in the BOJ aftermath.

EURUSD: Running out of steam around the strong resistance/offers starting at 1.0880 yesterday that I've been warning about a lot recently and re-sells duly placed but equally holding the old support line at 1.0780 in the retreat this time after dropping through 1.0800 amid the general USD demand. ECB Knot comments this morning suggesting multiple 0.5% rate hikes to come helping to support but he's a known hawk. I remain a rally-seller in peference as I still believe recent EUR demand a little overdone on ECB expectations. USDJPY: A hold of 127.75 this time after yesterday's support coming in at 127.50 and some pips gratefully banked having seen a rally to test 129.00 resistance and some re-sells duly placed per ongoing strategy. I prefer the rally-sell side still overall. EURJPY: Hold of 138.00 in Asia after the retreat from 139.20.

USDCHF: A further fall with EURCHF retreating further too but holding 0.9080 and now a few bids,line in the sand at 0.9150 albeit with sellers still poised. SNB's Schlegel speaking today and then Jordan tomorrow in Davos. EURCHF: Further sell interest to break down through 0.9900 but support line in the sand at 0.9880 tying in with those 0.9150 USDCHF bids but capping at 0.9920.

AUDUSD: A spike above the strong resistance at 0.7050 before a solid retreat to look at the old 0.6880 support amid some USD demand and a soft jobs report. NZDUSD: Capping at 0.6525 and a solid retreat to the support at 0.6375-80 again as I type still as the two-way business continues. PM Arden resignation creating ripples of uncertainty ofc. USDDCAD: Support at the old 1.3350 support line prevailing and a strong rally to 1.3520 amid the firmer USD/softer oil double whammy.

Interbank rates: 08.00 GMT

GBPUSD 1.2337

EURUSD 1.0820

EURGBP 0.8770

GBPEUR 1.1400

GBPCAD 1.6645

GBPCHF 1.1297

GBPZAR 21.2065

GBPHKD 9.6051

USDJPY 128.27

EURJPY 138.80

EURCHF 0.9902

EURHKD 8.4255

AUDUSD 0.6900

NZDUSD 0.6406

USDCAD 1.3494

USDCHF 0.9150

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