Happy clappy markets but Ukraine tensions increase
Tuesday 28 June 2022
Some better risk sentiment again earlier this morning despite esclation of war in Ukraine with equities firmer and JPY supply notable again but coming a little lower again now as the roller-coaster risk plays continue. Gold off its lows but oil price coming off its highs as I type.
A reminder that the ECB's June Sintra Forum continues today and tomorrow and we have a raft of speakers with Lagarde (09:00 BST, 13:45 BST), Lane (09:30 BST), Elderson (10:30 BST), and Panetta (12:00 BST). Meanwhile GBP traders waiting on BoE Cunliffe's speech today at 11:00 BST, though markets also awaiting BoE Governor Bailey’s speec on Thursday, which could provide clues on what type of policy measures the BoE intends to take going forward.
Month-end Spot dealing date today so keep your eye on the 4pm BST London fix as usual for USD net flow business.
As ever, deal on fact not second-guessing. 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: Another retreat after the 1.2333 failure and down she came to look at the old 1.2220-30 support line again. A good hold there though helped by the better risk tones but I remain poised to sell rallies. Timing as ever is crucial.Patience and discipline have indeed been a virtue on this one yet again.EURGBP: Capping at 0.8640 this time after another rally based on hawkish ECB expecations and holding the old resistance of 0.8610 in the retreat as jury remains out and plenty of second-guessing the ECB and BOE still. GBPJPY: 165.50 still holding retreats but capping into 167.00 as I type as the latest firmer risk rally starts to falter. I think the variable risk tones will help to keep contained still but looks underpinned for the moment.
EURUSD: Capped into 1.0620 yesterday so far this morning but underpinned around 1.0575 now amid hawkish ECB expectations and firmer risk. Ukraine still remains a very big elephant in the room. USDJPY: Finding support into 135.00 and now 135.50 as the firmer risk JPY supply returns, bizarrely given what's going on in Ukraine but markets in happy clappy/myopic mode aain for the moment.Dip demand still expected for the moment. EURJPY: 143.00 resistance broken and now the new base on the firmer EUR/risk double whammyy. Rally sellers poised still when sentiment turns softer. USDCHF: Support at 0.9560 gone now but more expected into 0.9520-30 again with sellers poised into 0.9580-00 still. Jury remains out on SNB and amid variable risk but CHF still in demand as further tightening exepected.EURCHF: CHF demand out stripping EUR demand still despite the better risk tones and clinging onto 1.0100 again as I type after failure into 1.01030 area again. Sellers will remain poised.
AUDUSD: Testing 0.6960-65 again after another hold of 0.6920 helped by the AUDJPY demand. GBPAUD testing 1.7650 again as I type after capping into 1.7750 again. NZDUSD also ranging tightly as jury remains out and finding support now into 0.6280 amid some general NZDJPY and commodty ccy demand but struggling to rally too far still. GBPNZD finding support at 1.9450 still but capping at 1.9525 again in the bounce so far.USDCAD: Down through 1.2860 on the CADJPY demand but 1.2820 holding so far. Sellers poised 1.2860-80
Let's continue to be careful out there.
Interbank rates: 08.37 BST