Jury still out
Tuesday 22 November 2022
A quiet week on the key data and CB front and shortened by the US Thanksgiving holiday so it's little surprise that we're seeing some tight FX ranges after yesterday's risk-off USD demand with China springing no fresh nasty surprises, not officially at least.
Equities, oil and gold all off their lows but cryptos softer again. Geopolitical risk in Ukraine still lurking too and while it may be a quiet week on the Central Bank front we have a few CB speakers up to the rostrum at various times with RBA's Lowe offering some cautious/dovish tones earlier this morning. Not a lot on the options front either atm. Today the OBR forecasts for the UK come under some scrutiny from the Treasury Select Committee.
As always though we should expect the unexpected and not get complacent. The important thing is to identify your preferred risk/reward entry/exit levels prior.
GBPUSD: A good hold of 1.1780 support area yesterday but capping at 1.1870 so far on the rally after a further hold of 1.1820 in the latest retreat. Some EURGBP selling helping to underpin a little but GBPJPY selling temeperring gains as USDJPY retreat and I remain bearish overall and poised to re=sell.EURGBP: Still down through 0.8700 and capping at 0.8680 for the moment but a solid hold of 0.8650-60 still too. I expect the two-way business to continue as jury remains out on both currencies and outlook but seems to look a little soft again overall.GBPJPY: Holding 167.50 in the latest retreat after testing 168.30 in yesterday's USDJPY rally-led rally despite the soggier risk tones. I would still expect two-way business as markets remain ever-fickle but with sellers to prevail overall despite a slight upward trend still atm.
EURUSD: A decent hold at 1.0240-50 and now pushing back up to look at 1.0280 res/offers amid the softer USD tones. USDJPY: The rally finally capped at 142.25 and some re-sells finally placed again above 142.00. The retreat is continuing as I type into 141.25-30 and some pips gratefully banked. EURJPY: Capping at 145.60 and in solid retreat since to 145.00 as USDJPY falls further. Expect more two-way business. USDCHF: 0.9550 strong support in sight again after a good cap at 0.9600 amid the softer USD tones and ongoing CHF demand overall. EURCHF retreating again. SNB ever-vigilant both sides of the coin. EURCHF: Capping at 0.9830 this timeE again amid some sofer EUR tones/CHF demand double whammy but support expected into 0.9800.
AUDUSD: Holding 0.6600 again after the extended dip into 0.6580 and now looking at 0.6650 amid the softer USD tones, shrugging off Lowes's comments.NZDUSD supported at 0.6100-20 still and testing 0.6150 amid the softer USD tones. USDCAD: Capping at 1.3400 amid oil prices basing after their extended falls and softer USD to now test 1.3400.
Interbank rates: 08.53 GMT