Greenback still on the back foot as another week gets underway
Monday 23 May 2022
Same ol' scene for the US Dollar with firmer risk appetite generally prevailing but markets will continue to second guess as we begin another week in the ever fickle world of financial markets. Equities are on the rise again as are gold and oil. JPY and CHF supply evident on the crosses and helping to underpin core pairs again for the moment as well as the softer Greenback tones.
Australia finds itself with a new goverment but with the notable gains by independent parties it's yet to be decided just how the Labour party will be able to rule. New PM Albanese is confident he can form a majority but by no means certain at this stage. Either way the Aussie Dollar is liking the change helped by the generally firmer risk tones elsewhere.
As I type Lagarde out on the wires saying ECB likely to be able to end negative inteest rates by end of Q3 and that's giving the Euro a lift higher.
As ever, I repeat my view that it's still a case of not over-analysing but keeping your focus on price action in core and cross-pairs. We will continue to trade in ever-fickle markets so the need remains to identify ranges and what levels present value for money. Algos will continue to knee-jerk price action on the variable headlines versus natural flows. Discipline is key as ever.
GBPUSD: Another rally above 1.2500 yesterday amid the USD selling after some dip demand per my update Friday " some dip demand expected amid softer USD tones." I remain poised to sell rallies but timing as ever is crucial. EURGBP: Still seeing good two-way business with a hold of 0.8430 and now posting 0.8465 amid the Lagarde comments. Expect more of the same. GBPJPY: Holding 159.30-50 now but equally failing at 160.75 so far this morning.Core pair dip demand on firmer risk tones but rally sellers will remain poised.
EURUSD: Found a base into 1.0550 again on Friday and now testing technical resistance around 1.0630 after the Lagarge initial comments.Option interest at 1.0600 in play today per my earlier tweet. USDJPY: Another hold into 127.00 and pips banked in the retreat. Re-sells placed on the subsequent failure into 128.00.Option interest of note just above 128.00.EURJPY: Now holding 135.00 amid the firmer risk and EUR tones.Should remain underpinned in current scenario but sellers poised into 136.00
USDCHF: Still seemingly a line being drawn at 0.9700. with SNB shadow lurking down there despite their recent change in narrative but equally rally sellers poised too.EURCHF: Re above, a line drawn still at 1.0250 for the momentand now above 1.0300 amid the general EUR demand/firmer risk this morning.
AUDUSD: Now finding a base at 0.7050 post-election but some reality-check selling at 0.7125-30. GBPAUD has 1.7650 as its base still but failing at 1.7785 this time in its extended rally through 1.7750. NZDUSD recovering some poise too amid softer USD/firmer risk tones. RBNZ meet on Wednesday with a 0.5% hike forecast but capping at 0.6475 so far. GBPNZD holding into 1.9400 now as NZDUSD rally outstrips GBPUSD. More bids 1.9350-80 and 1.9300-30. Sellers 1.9430-50, 1.9470-80, 1.9500-30.
USDCAD: 1.2775 support now after the lastest retreat from 1.2850 amid the softer USD/firmer risk double whammy with oil underpinned still.
A wonderful day at the hallowed Hall yesterday to celebrate SUFC legend John White and I was honoured and prvileged to be one of the organisers and MC for the latter part. See Twitter threads for more details but it really was the football community at its very best.
Let's continue to be careful out there and have a great week.
Interbank rates: 08.07 BST