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  • Mike Paterson

Jury still out

Wednesday 31 August 2022

Mixed risk sentiment and USD tones prevailing as we close another month. Greenback underpinned still overall but giving up a few gains while equity markets are off their lows after another soggy day yesterday. Gold still hovering around its lows and oil off its highs but also tightly bound as the jury remains out.

I would imagine the month-end flow business has been mostly done now but we'll keep our eyes on the 4pm London fix in case there's some final trades/netting to be done. Forewarned is forearmed.

GBPUSD: Fresh lows testing 1.1620 yesterday driven lower by the stronger USD and EURGBP demand. Patience a virtue still but I prefer the rally-sell side. EURGBP: Month-end EUR demand/hawkish ECB and some generally soggy GBP tones playing out again yesterday to breach 0.8600 but reversing a little since. I would expect some underpinning still today but looking for a retreat once the natural EUR demand subsides. GBPJPY: Per my update yesterday the jury remains out amid the mixed risk tones but underpinned overall between 161.20-50 still while finding sellers 162.50-60. We can expect some fragile price action still.

EURUSD: EUR buying across the board again yesterday but USD demand helping to cap this pair around 1.0050 again and now back down through parity.USDJPY: USD demand and month-end JPY supply helping to underpin but softer risk tones helping to cap into/around 139.00 where I warned of strong resistance/sell interest yesterday and now tested 138.25 in the retreat again.

EURJPY: Double month-end flow whammy (EUR demand/JPY supply) helping to underpin this pair but capping around 139.00 as core pairs find rally sellers. USDCHF: Now finding good support at an old resistance line at 0.9720-25 helped by some EURCHF demand too with the SNB never far away but sellers poised still on both.EURCHF: Also finding good support of its own at 0.9720-40 amid the general EUR demand but capping at 0.9780 so far with sellers ever poised.

AUDUSD: Finding good support around 0.6850 now after the retreat from 0.6960 where I noted offers yesterday and now capping around 0.6900 but expecting dip demand into 0.6850-60 still with some decent option interest tomorrow. GBPAUD in retreat again as AUDUSD out-performs GBPUSD again and currently testing 1.6925 from 1.7025. NZD holding 0.6120 after failing into 0.6190-00 and looking a little soggy still as USD remains underpinned. GBPNZD still capping around 1.9050 as NZDUSD outstrips GBPUSD with rally sellers still poised but 1.8950 holding so far.USDCAD: Capping around 1.3100 as oil price finds some dip demand after yesterday's USD demand/softer oil straight line move from 1.30000. Expecting some two-way business overall still amid the fickle variables.

Let's continue to be careful out there.

Interbank rates: 08.12 BST

GBPUSD 1.1665

EURUSD 1.0011

EURGBP 0.8582

GBPEUR 1.1650

GBPJPY 161.38

GBPCAD 1.5262

GBPCHF 1.1385

GBPZAR 19.8300

GBPHKD 9.0754

USDJPY 138.37

EURJPY 138.48

EURCHF 0.9738

EURHKD 7.7900

AUDUSD 0.6885

NZDUSD 0.6142

USDCAD 1.3080

USDCHF 0.9730

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