Jury still out
Thursday 6 October 2022
A topsy turvy 24 hours with initial USD demand giving way in the NY session to some supply again but it's a case of a little bit of Greenback grabbing again this morning as the jury remains out in these ever-fickle markets.
Equities a little softer in Europe and Gold near its highs after holding $1714. Oil remains underpinned after yesterday's OPEC+ 2m bpd output cut with analysts saying that the final market impact will depend on the length of the agreement. The latest quotas are touted to stay in place until Dec’23, with OPEC and non-OPEC Ministerial Meetings moved to a six-month schedule, in accordance with official OPEC meetings, to steer the output cuts, if the group chooses.
Meanwhile the fragile geopolitical backstory with Ukraine remaining the main elephant in the room still. Today sees US jobless claims ahead of tomorrow's eagerly anticipated but always over-hyped NFP data.
GBPUSD: Great two-way business again with drop to test 1.1230, a rally to 1.1380 and now testing 1.1300 again as I type. Patience definitely a virtue again but I prefer rally-sell side still as and when momentum fades. Cross flows still having a big impact too.EURGBP: Held 0.8700 this time but equally got a nose-bleed at 0.8775. I expect more two-way business to come. GBPJPY: Lows of 162.60 this time as core pairs both found good dip demand amid the better risk tones but retreating this morning as GBPUSD falls again. USDJPY still vulnerable to BOJ intervention but underpinned into 143.80-00 again after a hold of 143.50.
EURUSD: A retreat to test the 0.9830-50 area that it broke up from to finally test parity per my tweet. Cross flows, risk, Ukraine and ECB conjecture all in the frame still as well as USD flows. USDJPY: USDJPY still vulnerable to BOJ intervention/soggy-risk JPY demand but underpinned into 144.20-30 again now after a decent USD-led bounce. More two-way action expected.EURJPY: Underpinned at 142.50 for the moment amid core pair dip demand but sellers prevailing around 143.50 now.USDCHF: Yesterday's late USD demand saw the pair capping at 0.9890 but now that previous line at 0.9850 but support at 0.9780 still. EURCHF underpinned with SNB keeping an eye on matters still.EURCHF: A good cap at the old base of 0.9730 now with SNB still casting its shadow to add to general CHF weakness in these ever fickle times.
AUDUSD: Capping into 0.6540 in latest rallies having held 0.6460-70 again but in retreat again and good two-way pips whatever your bias. I remain a rally seller as my preferred side.. NZDUSD enjoyed a decent rally to break 0.5800 on yesterday's USD supply before retreating into 0.5720-30 again as I type as the two-way business continues. USDCAD: A good rally into 1.3700 on yesterday's USD demand despite the OPEC output cut and support since coming in at 1.3550 amid the firmer USD tones again.
Let's continue to be careful out there.