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  • Mike Paterson

Euro under pressure still

Tuesday 12 July 2022

EquitY markets ranging again with softer Gold and Oil too still after a small risk rally yesterday while the Greenback continues to dominate the landscape.Some JPY demand returning again as risk softens again a little and helping to cap cross and core pairs again but it's all eyes on EURUSD which is threatening to finally break parity with German DAX getting slapped again too on the Russian gas supply threat.

UK political uncertainty continues to provide a GBP backstory that will continue until Sept 5 when the new PM is announced while markets will continue to second-guess the central banks in their futile inflation vs recession fight.

As always, don't over-analyse but be ready with your preferred levels/strategy, place orders and let the algos do the heavy work. Discipline is key as always but equally hesitation can often ruin a great idea.

GBPUSD: Capping into 1.1900 now amid USD demand overall and helped by some GBPJPY supply returning but supported still by the soft EURGBP tones. I remain poised to sell rallies. Timing as ever is crucial. EURGBP: A cap now at 0.8465 as the Euro pressure continues but holding 0.8430 as jury remains out after the extended retreat. I still think we'll see two-way pips overall. GBPJPY: Capping at 163.00 and down to 162.00 as the jury remains out and softer risk tones return with USDJPY running out of steam above 137.50 too. I think the variable sentiment will help provide good two-way pips still for the moment.

EURUSD: Capped into 1.0050 amid the general EUR supply and USD demand to test 1.0000 which is holding so far. Barrier option interest will help defend initial attempts with tech support behind at 0.9980 but I remain a rally seller as my preferred side. Ukraine, Russian gas supplies, ECB, recession remain the focus. USDJPY: A hold of 137.00 in the retreat so far but sellers capping at 137.50 ahead of some decent option interest today as we also see some JPY demand return. EURJPY: Support at 137.25 this time so far as EURUSD holds 1.0000 after capping at 139.00 amid softer risk tones and ongoing EUR supply.

USDCHF: Support at 0.9800-20 now amid USD demand overall as EURUSD retreats further but EURCHF still capping and tempering gains. Jury remains out on SNB and amid variable risk but CHF still in demand as further tightening expected.EURCHF: Capping around 0.9880 now and another retreat to look at 0.9830 amid the softer risk and EUR supply double-whammy. Some SNB support still I reckon but sellers will remain poised as I've been warning.

AUDUSD: Capping at 0.6750-60 now and testing 0.6700 amid softer risk AUDJPY supply and USD demand, not to mention fragile metal prices still. GBPAUD currently testing 1.7600 after failing at 1.7680-00 in yesterdays's extended rally as AUDUSD retreat outstripped GBPUSD.NZDUSD capping into 0.6130 now but holding 0.6100 so far. GBPNZD bids into 1.9350 still after capping into 1.9500 this time. USDCAD: A base between 1.3000-20 now and testing 1.3050 amid firmer USD and oil price off its highs with some softer risk CADJPY supply again.

Let's continue to be careful out there and have a good week everyone.

Interbank rates: 08.30 BST

GBPUSD 1.1845

EURUSD 1.0015

EURGBP 0.8452

GBPEUR 1.1830

GBPJPY 162.47

GBPCAD 1.5415

GBPCHF 1.1644

GBPZAR 20.2550

GBPHKD 9.2234

USDJPY 137.23

EURJPY 137.30

EURCHF 0.9850

EURHKD 7.7965

AUDUSD 0.6713

USDCAD 1.3041

USDCHF 0.9843

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