BOE in focus
Thursday 24 June 2021
Another early report today as I have to head out again but will be back for BOE.
Firmer risk sentiment and JPY selling still notable overall but we have seen some capping out on various pairs over the past 24 hours. Reports of a Russian gun boat opening fire on a UK warship caused a quick reminder of our fragile world but settled again on UK denials.
BOE today at 12.00 casts a shadow and I expect the MPC to remain cautious regarding inflation and economic recovery but maybe more hawkish tones with some economists/analysts calling for a £50bln reduction in QE and rate hike by end of year. Are the CB's listening though? Fed's slight shift may allow BOE some room but unlikely to be in any rush. Keep an eye on the voting amid rumours of a split this time. Anything less than hawkish should send the Pound lower but as always we need to see what's been factored in at the time.
US Durable Goods data and more importantly PCE today at 12.30 GMT to get the inflation talk across the pond buzzing again. Fed's Williams speaking at 15.00 GMT in the mix too.
USD and risk sentiment remains variable meanwhile and patience and discipline are key of course and not being greedy, as ever. I hope you're making the most of these good moves whatever your bias.
GBPUSD: A further rally to test decent offers at 1.4000 and the failure encouraged me to re-sell with some pips banked in the retreat into 1.3950 already given the current underpinning. I remain a rally seller but still expecting dip demand. Keeping an eye on EURGBP and GBPJPY as always and the BOE today of course.EURGBP: A hold of 0.8530 this time again but rallies weak as GBPJPY demand continues as I warned yesterdzy.GBPJPY: A further rally on the firmer risk sentiment but failing at 155.20 per my tweets as core pairs capped too. Decent support line now forming at 154.40-50 though.
I remain a GBP rally seller across the pairs but being patient as the new week reveals itself. Risk to the downside though still overall.
EURUSD: Finding support at 1.1910 per the order board but equally capped this time at 1.1970 as cross plays still impact and USD remains firm. Option expiries in play today.USDJPY: Still finding support between 110.50-60 per my tweets but sellers poised above 111.00. EURJPY: 132.00 forming a good base now and a decent rally but sellers prevailing above 132.60 atm.USDCHF: Underpinned at 0.9150 this time as EURUSD capped at the extended 1.1970 with the SNB ever vigilant but sellers at 0.9200-10 now.EURCHF: Holding 1.0940 now amid the firmer risk tones and with SNB shadow/help ever present but sellers poised into 1.0980 still.
AUDUSD: Finding sellers like me into 0.7600 now having broken up through 0.7550-60 helped by the ongoing AUDJPY demand. Decent support now at 0.7550. I remain a rally seller overall and ever poised as upward momentum fades but respecting dip demand.Large options interest in play today at current levels as I warned yesterday.
Offers: 0.7585, 0.7600, 0.7620-25, 0.7650, 0.7675, 0.7700
Bids: 0.7550, 0.7535, 0.7520, 0.7500, b0.7480-85, 0.7465, 0.7450
USDCAD: Strong support line at 1.2300 broken yesterday amid firmer oil/CADJPY demand but bids at 1.2250 holding the falls so far.
Offers: 1.2320, 1.2350, 1.2375-80, 1.2400, 1.2430, 1.2450,1.2480, 1.2500
Bids: 1.2275-80, 1.2250, 1.2230, 1.2200, 1.2175, 1.2160,
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..
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 07.16 BST