Happy clappy brigade back in town
Tuesday 11 January 2022
Yes folks, after another little risk appetite wobble yesterday we're seeing equities and oil move higher again this morning with focus on the Senate Banking Committee hearing on Powell's renomination as US Fed Chair at 15:00 GMT. He's widely expected to be nominated so the attention will be on his Q&A (text of testimony is already out) and therefore the FOMC's steer in light of the recent expectations on policy normalization.
Also on the slate are outgpoing BUBA President Weidmann at 10.00 GMT, ECB's Lagarde at 10.20 GMT then Fed speakers George (14:30 GMT) and Bullard (21:00 GMT) . Forex pairs still ranging overall meanwhile but GBP finding support again amid the firmer risk tones and CHF supply still notable.
As always, don't over-analyze or second-guess but keep your focus on price action in core and cross-pairs and identify recent ranges to see whether we hold or break and what levels present value for money. Patience will invariably be a virtue but don't confuse patience with being stubborn. A new year maybe but same rules of trading always.
GBPUSD: Support coming yesterday at 1.3530 after the retreat from 1.3600 and some pips banked along the way per my tweet around 1.3540. Firmer risk tones now sees another test of the strong 1.3600-20 resistance amid the EURGBP supply/GBPJPY demand double whammy again after building support between 1.3560-80. GBPUSD rally sellers, including me, ever poised while keeping one eye at least on the cross flows and risk sentiment. EURGBP: Ranging still but testing the strong 0.8330 support area (GBPEUR 1.2000 resistance) again amid the firmer risk tones sellers after failing this time around 0.8350 (GBPEUR support 1.1970). Should continue to see good two-way buiness but beware the downside break through 0.8320-30. GBPJPY: 156.80 support held yesterday's retreat and then 156.40 as we climb higher again amid firmer risk flows but equally 157.30-50 still providing some sell interest as risk remains variable.
I remain a GBP rally seller across the pairs overall as my preferred trading side but being patient as ever. These markets are ever-fickle so good/tight position management essential.
EURUSD: That old 1.1280-85 support line back in play yesterday and now testing 1.1350 amid the generally softer USD tones but tempered by the firmer risk EUR supply elsewhere. USDJPY: Now capped at 115.50-60 which broke down yesterday but holding 115.00 so far helped by the risk-on JPY supply. EURJPY: 130.50-60 support now but sellers lurking at 131.00-20 this time amid the firmer risk EUR supply. USDCHF: 0.9220-30 support now building after the failure at 0.9275 helped by EURCHF failing above 1.0500 but with the SNB shadow ever present. EURCHF: SNB ever vigilant and rising German Bund yields helping to lift above 1.0480 but failing above 1.0500 as I type.
AUDUSD: Some good retail sales data helping to underpin along with the firmer risk AUDJPY demand but still failing to make headway through 0.7200 albeit equally support still coming in at 0.7160. Some decent option interest in play today helping to contain. USDCAD: Those one-month lows around 1.2615 held yesterday but the softer oil/risk rally failed at 1.2700 and now back down to 1.2640 amid the firmer oil/softer USD flows with CADJPY demand in play again.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.22 GMT