Markets feeling some Xmas excess still
Friday 24 December 2021
Some good two-way business in the past 24 hours to round off the week and we can expect some more reduced liquidity/ potentially increased volatility today and next week into New Year. Equity markets remain underpinned, as do gold and oil with end of month/year rebalancing models signalling movement out of bonds into equities. I trust you received my email yesterday with the month-end USD flow signals.
Just to remind you that I'll be taking our own well-earned Xmas break and so after posting today's updates I will return on Thursday 30th. May I take this oportunity to wish you Seasons Greetings and thank you for your business in 2021.
GBPUSD: The steady rally continued helped by risk-on GBPJPY demand/EURGBP supply but has capped at 1.3440 with support coming in now around 1.3380. GBPUSD rally sellers, including me, ever poised while keeping one eye at least on the cross flows and risk sentiment. EURGBP: Support tested at 0.8415-20 (GBPEUR up to 1.1890) in the latest retreat but holding and the rally to 0.8460 (1.1820) has helped cap GBPUSD. Larger support line at 0.8450 the next target. Sellers lining up 0.8465-80.
GBPJPY: 153.00 now a decent support line amid the underpinned USDJPY. Sellers remain poised on this and core pairs but caution 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: 1.1320 now providing support and trying to break up through 1.1340 as I type. USDJPY: Good support at 114.20-25 now amid the general JPY supply but failing to hold gains up through 114.50. EURJPY: 129.30 support now but and up through 129.50 but sellers poised. USDCHF: Failure yesterday again at the pivotal 0.9220-30 and now down through 0.9180 amid some general USD supply and EURCHF being capped but with the SNB ever vigilant. EURCHF: A quick dip to 1.0380 yesterday amid the ongoing CHF supply and failing above 1.0410 on the rebound but with the SNB shadow always lurking.
AUDUSD: 0.7200-20 support now as we see continued risk-on AUDJPY demand and firmer gold/commodity prices but failing at 0.7250 so far. USDCAD: Support coming in at 1.2800 after failing at 1.2860 amid USD supply, underpinned oil prices and the risk-on CADJPY demand.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.47 GMT