Jury remains out
Wednesday 25 May 2022
Down up down and all around again as the uncertainty continues and markets carry on with a futile second-guessing policy.
More rhetoric from the ECB, some hawkish, some dovish so the jury will remain out and the Euro suitably contained after its recent (over)extended rally. Pound recovering some poise after yesterday's post-data retreat but you know my views on that and indeed USDJPY too in the wake of the equally over extrended move below 126.50 but all showing the weaker, and hence my peferred, side.
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: A welcome extended retreat yesterday but 1.2470-80 holding the fall and pips banked along the way per my tweets. I remain poised to sell rallies but timing as ever is crucial.EURGBP: Capped at good pivot area around 0.8580-85 and once again in retreat amid ECB reality check and GBPUSD dip demand after yesterday's extended retreat. More two-way expected.
GBPJPY: Capped at 159.75 and now down through 159.00 again but expect demand into 158.50-75 as the uncertainty continues.
EURUSD: Found a top at 1.0750 in the extended rally on ECB rate hike fever but lower now on the reality check as I warned. USDJPY: Extended retreat into 126.30-50 yesterday amid the wobbles and pips banked in the retreat per my tweets. EURJPY: Now capping at 136.30 but holding 135.50 as the risk and ECB jury remain out. USDCHF: 0.9600 now forming another line of support with SNB shadow still lurking despite their recent change in narrative but equally rally sellers poised too still.
EURCHF: A line now at 1.02=50-60 for the moment after failure at 1.0320. SNB watching still but rally sellers continue to lurk.
AUDUSD: Now duly finding a base at 0.7050 but capping at 0.7120-25. NZDUSD double top into 0.6520 after rate hike of 0.5% as expected and now 0.6472. I warned yesterday of buy rumour sell fact play. Not rocket science. USDCAD: 1.2800 support now but sellers remain poised into 1.2850-75.
Let's continue to be careful out there.
Interbank rates: 08.32 BST