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  • Mike Paterson

Good two-way business still

Tuesday 19 July 2022

Still seeing some good two-way business and after USD demand returning yesterday we've seen some selling in Asia and early European trading again. Equities a little firmer after a late NY wobble and oil rallying too. Gold also is off its lows. Euro finding some support across the board added to by reports this morning that ECB will be discussing 50 bps rate hikes at this week's meeting. Discussion is one thing of course, action somewhat different given recent form.

AUD being underpinned by the RBA minutes today noting that the size and timing of rate hikes would be guided by data. RBA member Bullock then highlighted the more hawkish tones. UK labour report didn't make pretty reading with wages falling at fastest pace on record and 1.3 job vacancies. Pound brushing it off for the moment but its not good data.

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: Failure above 1.2000 yesterday and a retreat to 1.1925-30 amid some firmer USD tones but now back up at 1.2020 again. I remain poised to sell rallies. Timing as ever is crucial.EURGBP: Up and away this morning from 0.8480 to 0.8530 as Euro rallies on ECB rate hike hopes. I still think we'll see two-way pips overall as the jury remains out. GBPJPY: Better risk tones underpinning at 164.75-00 now after capping at 166.00 yesterday as the JPY/risk jury remains out.

EURUSD: A decent rally from 1.0150 amid the softer USD tones and ECB chatter but capping at 2 week highs of 1.0250 where there is also some technical resistance.Support building at 1.0180-00 now.USDJPY: Failing around 138.40 this time and now testing 137.70 amid softer USD tones.EURJPY: Support around 140.30-50 now as ECB rate hike hopes kick in and risk turns a little firmer but sellers poised still.USDCHF: Support at 0.9740 now history after capping around 0.9780 again with EURUSD on the march higher and EURCHF slipping back from 0.9950. Jury remains out on SNB and amid variable risk but CHF still in demand as further tightening expected.EURCHF: Holding 0.9900 amid some SNB support still I reckon but sellers prevailing at 0.9950 so far.

AUDUSD: A good base building at 0.6850 now after holding 0.6800 yesterday that I warned abpout here and now posting 0.6899 amid softer USD tones and those hawkish RBA Minutes. GBPAUD currently testing 1.7425 as AUDUSD rally outstrips GBPUSD. NZDUSD breaking up through 0.6200 this time after holding 0.6150 again then 0.6180 amid softer USD tones returning and some better risk. GBPNZD retreating through 1.9300 again as NZDUSD rally outstrips GBPUSD. USDCAD: A solid cap at 1.3000 this time amid softer USD tones and firmer oil price and falling to 1.2950 after yesterday's hold and rally from 1.2900. I expect some good two-way business still amid the variable risk and USD tones.

Let's continue to be careful out there.

Interbank rates: 09.33 BST

GBPUSD 1.1998

EURUSD 1.0212

EURGBP 0.8512

GBPEUR 1.1741

GBPJPY 165.36

GBPCAD 1.5540

GBPCHF 1.1644

GBPZAR 20.4274

GBPHKD 9.3558

USDJPY 137.92

EURJPY 140.90

EURCHF 0.9931

EURHKD 7.9692

AUDUSD 0.6870

USDCAD 1.2944

USDCHF 0.9720

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