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  • Mike Paterson

Bring on US CPI

Thursday 12 January 2023

All eyes on the US CPI data today at 13.30 GMT and we've seen some good two-way business again. It's the last US data of note before the Fed's Feb 1 meet and we can expect the algos to run riot as markets go into another second-guessing frenzy. JPY has been the stand out in the build up after a report by Yomiuri that the BoJ will look at the negative side effects of easing at next week’s meeting sent JPY higher and Japan 10y bond futures sharply lower.USDJPY fell in a rush and continued down thru old support line of 131.30-50 this morning to post 130.89 having peaked around 132.85 yesterday.


Equities have rallied strongly again and WTI is finding a good base around $76.50 but failing above $78 so far. Gold is still underpinned but making no further progress. Ukraine/Russia war continues to be the elephant in the room amid other geopolitical risk.


GBPUSD: Capping around 1.2180 now with larger interest at 1.2200-20 still but holding 1.2100 again in yesterday's retreat.I remain poised to re=sell per ongoing strategy. EURGBP demand still helping to cap.EURGBP: 0.8830 again providing good support amid the general EURUSD demand but capping at 0.8880 and ranging still as core pairs make their mind up. GBPJPY: 160.50 support area broken as USDJPY retreated on the BOJ reports but falls tempered a little by some firmer risk tones but now capping at 160.00 and the jury remains out.


EURUSD: Failing above 1.0775, levels not seen for 7 months, but underpinned 1.0720-30 still with support through the crosses too. Still don't over think it though. USDJPY: Capped above 132.80 yesterday . BOJ report-led dip to test the old 131.30-50 support area and I prefer the rally-sell side still overall. EURJPY: We've been up to test 142.85 but now back in retreat amid the JPY demand and testing 141.20 as I type. USDCHF:A solid rally yesterday with CHF supply returning amid better risk tones and EURCHF surging up through 200DMA resistance and 1.0000 triggering stops along the way amid general EUR demand. Capping above 0.9340 but support 0.9280-00 as we wait on CPI. SNB will be watching closely still as they won't want too much CHF weakness in their inflation battle plan. EURCHF: See above. Solid hold of 0.9950 but capping at 1.0050 so far. Bids building 0.9980-00.


AUDUSD: Good hold of 0.6880 but failing above 0.6920 as traders wait on US CPI. AUDJPY trading notable again.. Still keep an eye on AUD crosses for further clues. NZDUSD: Support coming in at 0.6340-50 still but failing into 0.6380 this time. USDCAD: Tight range still amid the fickle USD and oil price. Support at 1.3400 but sellers still poised 1.3425-50 as I highlighted again yesterday. Expect more two-way business overall. Beware US CPI ofc.


Traders can take advantage from my daily emails,(far more detailed than this summary aimed at my physical delivery clients), plus 1-2-1 mentoring sessions. mike@mspfx.co.uk for more details.

Interbank rates: 08.41 GMT

GBPUSD 1.2147

EURUSD 1.0750

EURGBP 0.8850

GBPEUR 1.1300

GBPJPY 159.92

GBPCAD 1.6332

GBPCHF 1.1333

GBPZAR 20.5108

GBPHKD 9.4804

USDJPY 131.66

EURJPY 141.53

EURCHF 1.0044

EURHKD 8.3897

AUDUSD 0.6893

NZDUSD 0.6345

USDCAD 1.3440

USDCHF 0.9344



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