Firmer risk tones return
Tuesday 21 June 2022
Markets and traders still making their mind up after last week's plethora of CB action/inaction but we're seeing some firmer risk tones so far in Asia and early Europe with equities rallying and JPY supply notable again.
Dovish comments from RBA's Lowe and the content of the Minutes from latest meeting gave the 0.5% hike hawks some cause for concern but AUDUSD finding support into 0.6950 helped by some AUDJPY demand and large option expiries at 0.7000 today that should help keep the range contained. National rail strikes and general discontent in the UK today but the Pound shrugging it off with market focus on rate hikes still, for the moment at least.
As ever, deal on fact not second-guessing. 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: A good hold of 1.2220-30 yesterday and that now becomes a decent support area. 1.2325 now capping the latest rally. Some pips banked again and remain poised to sell rallies but timing as ever is crucial. EURGBP: Holding 0.8565 now but still failing to make much progress above 0.8600 as jury remains out and plenty of noise coming out of the ECB and BOE still.
GBPJPY: 166.00 resistance now broken amid the renewed firmer risk JPY supply and USDJPY holding over 135.00. I think the variable risk tones will help to keep contained though still but dip demand notable for the moment.
EURUSD: 1.0520 support now but equally rally sellers poised still amid the cross flows/risk/usd variables and the ECB comments.USDJPY: Currently finding support into 135.00 amid the renewed firmer-risk JPY supply. Some dip demand still expected for the moment.EURJPY: Finding a base at 142.00 now amid the firmer risk tones and some general EUR demand this morning too. Rally sellers poised still when sentiment turns but looks underpinned for the moment. USDCHF: Sellers still poised into 0.9700-30 but support around 0.9660 then 0.9630 as jury remains out on SNB. EURCHF: Having another look above 1.0200 amid firmer risk tones after holding 1.0160 as markets continue to evaluate the SNB position
AUDUSD: Holding 0.6950 this time but got the shadow of large option expiries at 0.7000-10 today keeping it capped despite some decent AUDJPY demand. GBPAUD testing 1.7650 again after holding 1.7550 this time. NZDUSD finding a good hold of 0.6330 this time ans testIng 0.6360 as I type amid some NZDJPY demand.GBPNZD finding support at 1.9320 this time after capping into 1.9400. USDCAD: Supported at 1.2900 now after the fall through 1.2950 helped by some CADJPY demand and oil off its lows
Let's continue to be careful out there.
Interbank rates: 08.25 BST