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  • Writer's pictureMike Paterson

Markets and Greenback on firm footing still

Tuesday 4 January 2022

Equity and commodity markets have found the usual dip demand and heading higher again as we start another week and year with USD buying notable too as US bond yields rally too. USDJPY posting 5 year highs on the firmer USD/softer JPY flows.

As always, don't over-analyze or second-guess but keep your focus on price action in core and cross-pairs and identify recent ranges to see whether we hold or break and what levels present value for money. Patience will invariably be a virtue but don't confuse patience with being stubborn. A new year maybe but same rules of trading always.

GBPUSD: We saw a test of 1.3550-60 resistance after the break of 1.3525 but since retreated to test 1.3430-35. Decent rally since to post 1.3510 this morning but rinse n repeat amid the mixed risk tones. GBPUSD rally sellers, including me, ever poised while keeping one eye at least on the cross flows and risk sentiment. EURGBP: 0.8400-20 providing good resistance (1.1900 support) after yesterday's rally but holding 0.8360 (1.1961) so far amid the general risk-on EUR selling. GBPJPY: 155.80 now the decent support area after the dip test of 154.80-00 and now looking to test 155.50 amid the generally better risk tones and underpinned USDJPY. Sellers remain poised on this and core pairs when momentum fades but caution still required for the moment.

I remain a GBP rally seller across the pairs overall as my preferred trading side but being patient as ever. These markets are ever-fickle so good/tight position management essential.

EURUSD: 1.1280 providing support after a failure around 1.1360 this time amid the better-risk EUR supply. USDJPY: Good support at 115.50 now amid the general JPY supply and firmer USD tones to post 5-year highs after another hold of 114.85-00 yesterday.EURJPY: 130.50 support now but sellers poised around 131.00 as firmer-risk EUR supply vs JPY supply battle continues. USDCHF: Support coming in at 0.9125 as I mentioned on Friday and now 0.9160-70 after a failure at 0.9200 but with the SNB shadow lurking amid the EUR supply/CHF demand. EURCHF: That new support line at 1.0325-30 I mentioned on Friday duly held and now 1.0350-60 support after the failure into 1.0400 with SNB ever vigilant.

AUDUSD: USD demand sees failure at 0.7280 and a retreat to test 0.7180 but now 0.7215 amid some usual dip demand and AUDJPY buying. USDCAD: Support at 1.2700-20 again amid firmer USD tones after a hold of 1.2660 but capping at 1.2760 again for the moment amid more CADJPY demand.

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

Interbank rates: 09.15 GMT

GBPUSD 1.3509

EURUSD 1.1302

EURGBP 0.8366

GBPEUR 1.1951

GBPJPY 156.47

GBPCAD 1.7211

GBPCHF 1.2392

GBPZAR 21.5500

GBPHKD 10.5249

USDJPY 115.83

EURJPY 130.90

EURCHF 1.0376

EURHKD 8.8062

AUDUSD 0.7212

USDCAD 1.2738

USDCHF 0.9182

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