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  • Mike Paterson

Big week arrives

Monday 12 December 2022

The big week of Central Bank action has finally arrived with the US Fed on Wednesday the prime focus then SNB, BOE and ECB on Thursday. Quiet in Asia after an initial round of some further USD demand following Friday's rally on the stronger US PPI data then falling back on the over-stretched algo-led move.

Equities have had another wobble and oil has fallen again after failing to hold rally gains from Friday but gold is consolidating a little still and been up to look at $1800 this time. China's COVID relaxtion measures still have analysts out on whether that's a positive or negative for sentiment and the global economy at large given the inevitable rise in cases being seen/expected further Geopolitical risk in Ukraine still lurking too. UK GDP data earlier was unconvincing overall.

GBPUSD: A good hold of 1.2200 after Friday's PPI-led retreat and a decent rebound rally up through 1.2300 only to run out of puff at 1.2330 and been all the the way back down to look at 1.2200 this morning amid the latest wave of USD demand. Good two-way business whatever your bias and I remain poised to re=sell. EURGBP: Support line at 0.8600 broken on Fridat but holding 0.8560 but capping at 0.8620 since. Good two-way action still as I've been expecting/highlighting. GBPJPY: A cap at 168.00 this time but equally now holding the old 167.20-40 reistance line since broken as core pairs both find dip demand again.

EURUSD: A decent hold at 1.0500 this time and broken up through 1.0525-40 again after sellers prevailing above 1.0560. USDJPY: A solid hold of 135.60 on Friday in the retreat and some pips gratefully banked before the PPI-led sharp rally before failing into 137.20.EURJPY: Holding 143.30-144.50 still (just) as we continue to range. USDCHF: Capping at 0.9380 again on Friday then 0.9370 amid the softer USD tones returning and with traders still looking at SNB tightening/hawkish tones this week but holding 0.9320-30 still amid EURCHF bouncing again with SNB ever-vigilant. EURCHF: A hold at 0.9820-30 this time after capping at 0.9880 amid hawkish SNB expectations and we continue to range.

AUDUSD: Good support around the old 0.6740 resistance line then a break up through 0.6800 amid the softer USD tones before finally capping at the larger 0.6820 level to post 0.6760. I remain a rally seller as my preferred side/strategy. NZDUSD now capped at 0.6425 where we also have large option interest on 14th and testing 0.6375-80 support again before bouncing as I type. USDCAD: Underpinned still and now that line coming in at 1.3600 then 1.3640 on the softer oil price story after the retreat from 1.3680 as we post 1.3665.

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. Contact me to take advantage of currently reduced prices.

Let's continue to be careful out there.

Interbank rates: 08.35 GMT

GBPUSD 1.2247

EURUSD 1.0539

EURGBP 0.8604

GBPEUR 1.1620

GBPJPY 167.62

GBPCAD 1.6735

GBPCHF 1.1454

GBPZAR 21.4077

GBPHKD 9.5505

USDJPY 136.87

EURJPY 144.24

EURCHF 0.9853

EURHKD 8.2185

AUDUSD 0.6772

NZDUSD 0.6392

USDCAD 1.3657

USDCHF 0.9347

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