Jury out still
Wednesday 21 December 2021
Ever-fickle markets and we're still seeing some variable risk appetitite with equity/commodity markets and yields underpinned albeit off their highs and falling back a little as I type. Some USD demand notable, reportedly for year-end but Omicron concerns/fallout lurking though and markets second-guessing Central Banks still.
Last week before Xmas and we can expect some reduced liquidity/ increased volatility.Patience will invariably be a virtue but don't confuse patience with being stubborn. Let the algos do their work and have orders in or fingers poised to take advantage of headline-led moves.
GBPUSD: Support line around 1.3200, then 1.3220 and now 1.3240 but capping above 1.3280 with some good-size option interest in play tody. GBPUSD rally sellers, including me, ever poised while keeping one eye at least on the EURGBP and GBPJPY cross flows.EURGBP: A good hold of 0.8480-85 (1.1780 cap) again so far in the retreat from capping at 0.8525 (1.1730 support) as we continue to range still overall.GBPJPY: 150.80-00 now the a decent support line amid the firmer USDJPY and generally firmer risk tones but sellers remain poised on this and core pairs.
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: 1.1260 now providing support but failing into 1.1300 amid the cross play and USD flows. USDJPY: Climbing steadily higher and now testing 114.30 again amid the general USD demand and JPY supply double whammy. EURJPY: 128.50 support now but mixed tones still with risk-on EUR and JPY supply. USDCHF: Back up through the pivotal 0.9220-30 again amid the general USD demand and renewed CHF supply as EURCHF also rallies with the SNB ever vigilant. EURCHF: 1.0380 duly held and now support coming in at 1.0400 again with the SNB shadow always lurking but tempered by EUR supply elsewhere
AUDUSD: 0.7120 support now helped by some risk-on AUDJPY demand but capping into 0.7160 so far. USDCAD: Solid base at 1.2900 still after capping at 1.2945, where I noted offers yesterday, amid rising oil prices and risk-on CADJPY demand.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.25 GMT