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  • Writer's pictureMike Paterson

Firmer USD tones overall still but not one-way traffic.

Tuesday 23 November 2021

Yesterday saw US President Biden nominate Jerome Powell for another stint as Chairman of the US Federal Reserve and despite JP's dovish stance markets decided it was a happy-clappy move for equities, yields and the Greenback in the original algo knee-jerk.

Some retracement after but fun and games already this morning as a sharp spike in shorter-term US bond yields saw USDJPY up through 115.00 in a rush amid some general Greenback demand but now back down to 114.62 as I type. Was it a fat finger or planned trade execution? The jury remains out but it's added to an already fractious market.

Flash PMI data making its way out this morning and some positive data so far.

It's still a case of markets and traders second-guessing the central banks over inflation measures with fragile risk sentiment ever-lurking amid rising COVID cases in Europe and political unease around Ukraine, Taiwan and elsewhere. A fragile world out there still.

GBPUSD: Support at 1.3400 now broken and some pips banked again in the retreat per ongoing strategy. The pair does remain underpinned by GBPJPY but some EURGBP demand helping to cap as I type. GBPUSD rally sellers, including me, ever poised. EURGBP: Another good hold of 0.8380 (GBPEUR 1.1930) sees a test of the top side of the range but 0.8420-25 capping so far (GBPEUR holding 1.1870) as we continue to range. GBPJPY: Sellers at 154.30 now prevailing after that earlier USDJPY/yield spike rally but testing 153.50 amid the softer risk and USD tones since.

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: Support at 1.1225-30 held the fall through 1.1250 yesterday now still in place but equally sellers now at 1.1280-00 lurking amid all the uncertainty and firmer USD tones generally. USDJPY: Strong rally yesterday amid the firmer USD tones and again this morning to post highs of 115.15 on the US yield spike but falling back to test 114.50 since. EURJPY: 128.80 now providing support but with rally sellers poised into 129.50 now. USDCHF: Support still coming in between 0.9280-00 amid firmer USD and with the SNB ever vigilant on EURCHF but sellers around 0.9335 as EURCHF fails to rally too far. EURCHF: 1.0450-60 still providing the new base with SNB shadow lurking. Sellers between 1.0500-20 should hold this latest rally.

AUDUSD: 0.7220-25 support broken but 0.7200 holding the further retreat as we see general consolidation bit sellers poised still. USDCAD: 1.2680-00 now holding amid firmer USD tones but failing around 1.2750 amid firmer risk/oil prices and hence some CADJPY demand again.

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

Interbank rates: 08.20 GMT

GBPUSD 1.3388

EURUSD 1.1254

EURGBP 0.8405

GBPEUR 1.1894

GBPJPY 153.54

GBPCAD 1.7043

GBPZAR 21.1503

GBPHKD 10.4269

USDJPY 114.67

EURJPY 129.09

EURCHF 1.0483

EURHKD 8.7657

AUDUSD 0.7220

USDCAD 1.2727

USDCHF 0.9310

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