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  • Writer's pictureMike Paterson

Jury still out as US CPI data disappoints the hawks

Thursday 12 August 2021

Yesterday's US inflation data came in a little under expectations but was enough for hawks and USD bulls to pause for breath after recent rallies but FX markets still tightly bound after the initial USD sell-off.

Some JPY and CHF supply still evident on core pairs and crosses after the shake-down which is underpinning other core pairs too in the dips. UK GDP released earlier this morning showed some growth again but still a long way from pre-COVID levels and the jury remains out on the extent of the recovery.

Patience and discipline in trading are key as ever and not being greedy as we continue to range tightly overall. Still some good two-way pips to be had as the jury remains out so picking your moments and levels are more important than ever.

GBPUSD: Bids/support at 1.3800 duly held the fall and pips banked again with re-sells into 1.3880 per ongoing strategy and my tweet. I remain a rally seller overall while keeping an eye on EURGBP and GBPJPY as always.

EURGBP: 0.8480-85 offers prevailing again but equally support still at 0.8350-60 as we continue to range tightly with core pairs generally moving in unsion.GBPJPY: 153.00 now supporting as core pairs find dip demand but sellers still poised around 153.20-30amid the variable risk tones.

I remain a GBP rally seller across the pairs but being patient as ever. These are risk sentiment markets and ever fickle so good/tight position management essential.

EURUSD: Capping above 1.1750 in the post-CPI rally but finding support at 1.1730 now amid some large option interest lurking either side of the price today and with cross flows very much making an impact still.USDJPY: Another good hold of 110.30 after failure into 110.80 per my tweet yesterday.EURJPY: 129.80 still providing resistance but underpinned at 129.40-50 again amid the variable risk and core pairs rsnging.USDCHF: 0.9200 still providing good support with the SNB always keeping an eye on matters but failing at 0.9240. EURCHF: 1.0800 now the new base with SNB shadow ever present but sellers still poised.

AUDUSD: A failure into 0.7390 again in the post-CPI rally but 0.7350-60 providing decent pivotal support.USDCAD: Support at 1.2520 now history in the post-CPI retreat but testing that area again as I type after finding support at 1.2500 helped by today's large option interest that I've been warning about this week. CADJPY oil/risk related action still in play too.

Let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates: 07.45 BST

GBPUSD 1.3861

EURUSD 1.1738

EURGBP 0.8467

GBPEUR 1.1808

GBPJPY 153.03

GBPCAD 1.7352

GBPZAR 20.4112

GBPHKD 10.7457

USDJPY 110.40

EURJPY 129.58

EURCHF 1.0818

EURHKD 9.1003

AUDUSD 0.7356

USDCAD 1.2518

USDCHF 0.9217

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