Bring on the Central Banks
Wednesday 15 December 2021
The long-awaited Central Bank decisions begin today at 19.00 GMT when the US Federal Reserve announce their latest policy then SNB, ECB and BOE tomorrow. Throw in OPEC oil talks with COVID/Omicron unknowns continuing to lurk and the uncertainty/tight ranging is understandable.
Higher than expected (although not exactly surprising) UK inflation data out earlier has re-ignited speculation on the BOE raising interest rates tomorrow (I'm still not convinced on that one) while expectation on the FOMC today is to officially lose the "transitory" label on inflation and outline further taper/rate hike path. Once again I'm not convinced that we'll see the hawkish tones that markets are pricing in.
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. If in doubt, stay out. 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: Basing at 1.3220 now after a good hold of 1.3190-00 yesterday and staging a good rally this morning after the CPI data but failing at 1.3280 so far per my tweet and some re-sells duly placed. Good two-way pips to be had if you're not greedy still. GBPUSD rally sellers, including me, ever poised while keeping one eye at least on the EURGBP and GBPJPY cross flows. BOE in focus too of course. EURGBP: Holding 0.8485 this morning after the retreat from 0.8525 on the UK inflation data. Expect more 2-way business while we continue to range amid the general uncertainty. BOE and ECB tomorrow both in focus. GBPJPY: 150.20-40 now providing the support but capping at 151.00 on the rally so far as sellers remain poised amid the variable risk tones. Should continue to see good two-way business as risk sentiment continues to be ever-fickle.
I remain a GBP rally seller across the pairs overall as my preferred trading side albeit still against the grain currently so being patient as ever. These markets are ever-fickle so good/tight position management essential.
EURUSD: Previous support at 1.1260-70 broken after a solid retreat from 1.1320 but the next line at 1.1250 holding so far as we continue to range but looking soft still. ECB tomorrow in focus. USDJPY: Capping at 113.75-80 still after holding 113.40-50 again as the range narrows amid variable risk and USD tones. FOMC in focus. EURJPY: 128.00 support stillholding by and large but rallies getting weaker as EUR supply returns.
USDCHF: Support at 0.9190-9200 holding and now 0.9220 again with the SNB ever vigilant and helped by some general USD dip demand and EURCHF back above 1.0400 after another quick dip below. EURCHF: Back above 1.0400 again with SNB shadow lurking still but sellers poised still as EUR supply returns.
AUDUSD: 0.7100 support back in place after failing at 0.7135 this time amid the generally firmer USD tones and commodity currency supply.USDCAD: Further CAD weakening on softer oil tones and generally firmer USD after a good hold of 1.2840. Sellers poised 1.2880-00
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.38 GMT