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  • Mike Paterson

Equities in retreat and Greenback in demand

Thursday 13 May 2021

The latest US CPI data duly came in stronger and that set the Greenback on a bid tone with equity and commodity markets falling with Fed taper expectations once again rising but the Fed themselves seemigly still in denial. US PPI out today at 12.30 GMT in focus now as European equities tumble further as I type as. Bitcoin and other cryptos also feeling the heat as Musk says Tesla won't accept crypto payments for its cars.

I warned yesterday that the landscape remains fragile but once again we're not a seeing a big reflection in risk sentiment on FX pairs. This is all about the Greenback for the moment. France, Germany and Switzerland on Ascension Day hols today reducing liquidity and adding to the volatility.

Jury still out overall so, as always in these fickle times, be careful with your trading. Pick your preferred entry/exit levels and don't be greedy or over-analyze. Patience a virtue too of course.

GBPUSD: Still capping into 1.4160 and a good rally-sell opportunity yesterday in all the algo-driven CPI aftermath. and now down again testing 1.4030 as I type. EURGBP: Failing above 0.8610 after a good hold of 0.8550-60 yesterday. I think we have our range for the moment.

GBPJPY: Rally sellers at 154.50 now prevailing after the break highers yesterday but still underpinned at 153.50.

I remain a GBP rally seller across the pairs but still not getting over greedy with expectation on the retreats.

EURUSD: A good hold of 1.2050 so far after the 1.2150 cap yesterday and some re-sells pips banked. Large option interest today but now further away at current levels.USDJPY: A good hold of 108.60 yesterday and a solid rally post CPI but failing into 109.80 so far.EURJPY: 132.00 now a decent base after capping into 132.80 after the break finally of 132.50.USDCHF: Successfully held onto 0.9030 this time as EURUSD retreated and with EURCHF dip demand still around 1.0950 with the SNB ever watchful and ready to help. Rally sellers still poised.EURCHF: Still holding 1.0950 but equally failing above 1.0980 atm

AUDUSD: Another decent retreat, this time into 0.7700 amid the firmer USD/softer metals tones but some AUDJPY demand still helping to support along the way. Re-sells duly placed upstairs and pips banked. Decent option interest today if we rally. USDCAD: 1.2130 cap finally broken amid the firmer USD/softer oil tones after a hold of 1.2050 yesterday. Keep an eye on CADJPY still.

Let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates: 08.50 BST

GBPUSD 1.4059

EURUSD 1.2092

EURGBP 0.8601

GBPEUR 1.1625

GBPAUD 1.8223

GBPCAD 1.7067

GBPJPY 154.01

GBPZAR 19.7668

GBPHKD 10.8930

USDJPY 109.55

USDZAR 14.0910

EURJPY 132.47

EURCHF 1.0970

EURHKD 9.3703

AUDUSD 0.7713

USDCAD 1.2142

USDCHF 0.9072

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