Better risk tones return
Tuesday 21 December 2021
Yes folks, in these ever-fickle markets we've seen some better risk appetitite return and equity/commodity markets and yields have felt some love again after yesterday's wobble and that's helped to underpin risk sentiment again, bringing a return of JPY supply bur Forex pairs ranging still overall with CHF demand still notable. Increasing Omicron concerns lurking though and markets second-guessing Central Banks still.
As always, don't over-analyze or second-guess but keep your focus on price action in core and cross-pairs and identify recent ranges to see whether we hold or break and what levels present value for money. Last week before Xmas and we can expect some reduced liquidity/ increased volatility.
Patience will invariably be a virtue but don't confuse patience with being stubborn. Let the algos do their work and have orders in or fingers poised to take advantage.
GBPUSD: That support line around 1.3160-70 duly held as has the 1.3250-60 resistance I highlighted in a tweet but 1.3200 providing a base now. GBPUSD rally sellers, including me, ever poised while keeping one eye at least on the EURGBP and GBPJPY cross flows. EURGBP: A good hold of 0.8515-20 (GBPEUR cap 1.1744) now but a couple of failures above 0.8550 (GBPEUR support 1.1695) amid the GBP better risk dip demand on GBPJPY. Ranging still overall. GBPJPY: 149.80-00 now the latest support line amid the firmer risk tones but we continue to range.
I remain a GBP rally seller across the pairs overall as my preferred trading side but being patient as ever. These markets are ever-fickle so good/tight position management essential.
EURUSD: 1.1275-80 now providing support again but struggling to hold above 1.1300-10 as I type amid the cross play flows. USDJPY: Capping still at 113.80 after the hold of 113.30 then 113.50 as we continue to range.EURJPY: 128.00 support now but rallies capping into 128.40 as I type so far. Mixed tones with risk-on EUR and JPY supply.USDCHF: Capping at the pivotal 0.9220-30 again and retreating amid some general USD supply and CHF demand but with the SNB ever vigilant. EURCHF: Back down testing 1.0380 as risk-off CHF demand prevails but tempered by EUR dip demand elsewhere and with SNB shadow lurking still.
AUDUSD: 0.7100 support now helped by the risk-on AUDJPY demand and firmer commodity prices after the retreat from 0.7130 this time. USDCAD: Solid base at 1.2900 now but capped at 1.2962 amid rising oil prices and risk-on CADJPY demand.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.43 GMT
GBPUSD 1.3243
EURUSD 1.1300
EURGBP 0.8531
GBPEUR 1.1721
GBPJPY 150.44
GBPCAD 1.7124
GBPCHF 1.2192
GBPZAR 20.9466
GBPHKD 10.3171
USDJPY 113.60
EURJPY 128.33
EURCHF 8.7999
EURHKD 10.3171
AUDUSD 0.7121
USDCAD 1.2938
USDCHF 0.9197
