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  • Mike Paterson

Greenback still in retreat

Friday 2 December 2022

USD supply still prevailing this morning with equities and oil still underpinned ableit of their highs as markets continue to weigh up just how dovish were those Powell remarks on Wednesday. Lots of other Fed heads chipping in since but with US treasury yields falling traders need little excuse to keep pressure on the Greenback with USDJPY leading the way again. Gold also underpinned and now up through $1800 amid the uncertainty. Geopolitical risk in Ukraine still lurking too, quite apart from all the CB second-guessing.

I don't normally sign up to the US NFP data hype but given just how fickle these markets are and with traders currently dancing on hot coals we can expect some fun and games around 13.30 GMT today.

Remember that conjecture and second-guessing should stand to one side on data and news releases. Focus on the price action and let the algos do the heavy lifting/dropping. The important thing is to identify your preferred risk/reward entry/exit levels prior.

GBPUSD: Certain trading models had been looking for 1.2300 in the event of 1.1650 provding good support, and while it certainly hasn't been a stragiht liner higher yesterday did see a brief break above the target level and justifying my caution/reluctance to sell rallies in recent days. Short USDJPY still remains my preferred trade post Powell. EURGBP: Finding good support at 0.8550 yesterday in yesterday's retreat with that month-end EUR demand out the way and now bouncing off 0.8580 again now after capping at 0.8610. I expect the two-way business to continue as jury remains out on both currencies and outlook.GBPJPY: A good cap at 167.00 amid the USDJPY supply and variable risk and now testing 164.00 in the extended retreat.

EURUSD: A decent hold at 1.0450 this time and underpinned still on the USD supply but capping into 1.0550.Should still see some mixed business and I remain a rally seller overall as my preferred side.USDJPY: A small pause for breath between 136.00-50 but it didn't take much rocking to move lower and now below 134.00 amid the renewed USD supply. EURJPY: Capping at 143.00 this time but holding 140.75 as the soft tones continue. USDCHF: Now capping at the old support line 0.9400-20 but losses tempered by some EURCHF dip demand still. SNB ever-vigilant.EURCHF: A hold around 0.9830-40 this time after finding 0.9870a step too far thia time amid the USDCHF supply and we continue to range.

AUDUSD: Holding around 0.6800 this time amid the softer USD and potentially positive China covid news but 0.6850 capping.NZDUSD supported at 0.6350 now amid the US supply and now looking at 0.6400 in the extended rally. USDCAD: A good hold of 1.3400 but capping at 1.3475 amid the oil price variables and USD supply.

As we look at trading opportunities it's even more important not to over analyze but trade the price action with discipline and patience. I can help with this in my 1-2-1 sessions and now is the time, more than ever, to get on board with those if you haven't already done so. Contact me to take advantage of currently reduced prices.

Let's continue to be careful out there. Have an enjoyable weekend.

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