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  • Mike Paterson

Greenback grabbing continues

Friday 19 August 2022

Yesterday I warned of USD strength but said that key resistance levels were standing in the way of further gains. Well, cue a further rise in US bond yields, decent US data and some option-based support out the way and we close the week amid significant Greenback gains.

Equities are underpinned again with oil and gold off their highs. German PPI data this morning proved that inflation isn't going away any time soon. Jackson Hole symposium for central bank heads in a week's time casting a shadow.

GBPUSD: Capped at 1.2050, then 1.2000 post-option expiry time then 1.1950 and now testing 1.1885. I will stand poised for re-sells with patience a virtue still. EURGBP: Holding 0.8440 again and now testing bigger resistance/offers arpound 0.8485-00 amid weaker GBP tones. Two-way opportunity still envisaged.GBPJPY: Now based around 161.50 after the retreat from 162.80-00 amid further GBP weakness but supported by USDJPY staging a decent rally through 136.00. The risk and USD jury remain out and we can expect some fragile price action still.

EURUSD: Finally breaking down through 1.01000 amid the firmer USD tones and with that sizeable option interest out of the way. Rally sellers including me still ever-poised but patience proving to be a virtue.USDJPY: One final dip yesterday which held at 134.60 but then it was up and away and finally through the strong resistance area of 135.50-60 that I had warned about to now post 136.75.EURJPY: Forming a base now around 137.25 on some core pair dip demand but failing into 138.00 with sellers poised still whenever sentiment turns.USDCHF: Currently capping into 0.9600 after holding 0.9560 EURUSD finds some dip demand again and EURCHF steady with the SNB ever vigilant. CHF demand still notable helped by rate hike expectations.EURCHF: 0.9640-50 support now with SNB smoothing in the retreat but some inherent CHF demand still capping rallies too.

AUDUSD: Good support this time into 0.6880 after the retreat from 0.6970 amid the firmer USD. GBPAUD now holding 1.7200 after the break down through 1.7350 as GBPUSD finally tumbles. NZDUSD capping at 0.6250 now and testing 0.6220 support this morning as the post-RBNZ sell-off continues amid the firmer USD tones. GBPNZD holding around 1.9050 now but rally sellers still poised. USDCAD: Supported at 1.2880-00 still amid the firmer USD tones and now testing 1.2980 as oil moves off its highs too. Expecting some two-way business overall though still amid the fickle variables.

Back up to Lords now for what could be a Test-defining day. Let's hope the weather holds. Route planned for tomorrow too to avoid the train strikes. Meanwhile the mighty Shrimpers take on Oldham at the hallowed Hall. Remember when the oppo were in the Premier League. At least we haven't fallen that far.....

Let's continue to be careful out there and have a top week-end wherever it takes you.

Interbank rates: 08.38 BST

GBPUSD 1.1917

EURUSD 1.0090

EURGBP 0.8464

GBPEUR 1.1812

GBPJPY 162.72

GBPCAD 1.5430

GBPCHF 1.1386

GBPZAR 20.0795

GBPHKD 9.2623

USDJPY 136.53

EURJPY 137.74

EURCHF 0.9665

EURHKD 7.8414

AUDUSD 0.6914

NZDUSD 0.6234

USDCAD 1.2966

USDCHF 0.9580

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