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  • Mike Paterson

Forex market jury still out

Tuesday 29 March 2022

Yesterday saw USDJPY leading the way again, and some, as we tested the big 125.00 area before retreating as did commodity currencies but all finding dip demand as the Forex jury remains out amid the Ukraine and central bank backdrop. Equity markets, gold and oil are finding support still albeit off their highs again. The Pound came in for a bit of a sell-off amid some more dovish/cautious remaarks from BOE Governor Bailey but no great surprise given the rhetoric after the last policy announcement. BOE Quarterly Bulletin published today at 12.00 BST.

EURUSD has found itself drawn to 1.1000 where I warned of large option interest today through to Thursday after holding 1.0950 in yesterday's general USD demand-led sell-off and that interest should help keep the range contained.

GBPUSD: Found a base into 1.3060 in yesterday's retreat and pips gratefully banked again per ongoing strategy. Re-sells made this morning into the 1.3120-25 offers. I remain a rally seller overall a while keeping an eye on EURGBP and GBPJPY as always.EURGBP: Finally saw decent move yesterday amid the GBP selling combined with the general EUR dip demand and we're now seeing a test of 0.8400 after the 0.8330 hold further helping to cap GBPUSD.Some two-way business/consolidation expected now.GBPJPY: Finding support at 161.25 after the JPY-led break higher and subsequent rapid retreat after the failure 164.50. Not a pair for the inexperienced trader right now.

EURUSD: A good hold of 1.0940-50 as we gravitate back around 1.1000 amid some general EUR dip demand and where we have the large option interest I've highlighted. USDJPY: Caution still required whichever side you're playing right now after yesterday's rapid test of 125.00 and equally rapid retreat. Year-end flows in play with Yen repatriation to help cap but importers needing to buy some USD too. EURJPY: Support now at 135.50 after yesterday's spike and failure at 137.50 but contained for the moment as core pairs find good two-way interest.USDCHF: Support at 0.9325-30 this time with EURCHF showing aome further demand amid general EUR buying and with SNB shadow lurking amid the fragile backdrop. Sellers still poised.EURCHF: Support/bids at 1.0250-60 again with SNB lurking in the dips but rally sellers poised still though as I've been warning.AUDUSD: Another retreat yesterday amid some general commodity-ccy supply but a good hold of 0.7465 again and capping at 0.7520 so far in a rally helped by some softer USD vibes.USDCAD: Holding 1.2475 in the latest retreat after a cap at 1.2585 as oil rallies off its lows but sellers poised now at 1.2520-30 then 1.2550. Two-way business still expected amid all the uncertainty.

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

Interbank rates: 08.27 BST

GBPUSD 1.3112

EURUSD 1.1014

EURGBP 0.8398

GBPEUR 1.1904

GBPJPY 162.23

GBPCAD 1.6375

GBPCHF 1.2241

GBPZAR 19.1870

GBPHKD 10.2049

USDJPY 123.74

EURJPY 136.30

EURCHF 1.0292

EURHKD 8.5755

AUDUSD 0.7514

USDCAD 1.2497

USDCHF 0.9346

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