Markets steadier but fragile still
Wednesday 18 August 2021
Equities, oil and US treasury yields still on the back foot and demand for JPY and CHF still notable but some underpinning in cross and core pairs also being seen for the moment at some key levels after this week's extended retreats.
UK inflation data has come in under expectations this morning which will come as some relief to the BOE but rising prices still in the system and more being generated amid the COVID related supply issues. The RBNZ left rates on hold rather the expected hike citing latest COVID cases as a cause for concern and we saw the Kiwi drop sharply but equally rebound as markets continued to price in a hike sooner rather than later.
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: The retreat continued amid the GBPJPY selling to post lows of 1.3723 and pips banked along the way again per ongoing strategy and my tweets. I remain a rally seller while keeping an eye on EURGBP and GBPJPY as always.
EURGBP: Supported now at 0.8510-15 but ranging tightly as core pairs move in tandem by and large. GBPJPY: 150.80-00 now the immediate cap as the risk-off tones continue but aupported at 150.50 now.
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: Capped at 1.1760-80 now but finding support at the key 1.1700 area but ranging tightly with cross flows very much making an ongoing impact along with large options rolling of tomorrow. USDJPY: 109.20-30 now providing support as markets settle a little but 109.80 still presents a decent cap.
EURJPY: 128.60-80 now providing resistance after holding 128.20 in the latest retreat amid the softer risk tones.
USDCHF: 0.9100 duly held with the SNB ever vigiliant but sellers poised above 0.9150 with EURCHF still on the back foot. EURCHF: 1.0730 now the resistance as we drop further to test 1.0700 amid the softer risk CHF demand but with SNB shadow ever present.
AUDUSD: Finding a cap at 0.7300 and a decent move lower to test 0.7250 leaving that 0.7330 option interest in its wake. USDCAD: Now finding a base at 1.2600 amid some firmer USD tones and softer oil price and CADJPY selling in play still but finding sellers above 1.2640 now. Large options on tomorrow casting a shadow.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.48 BST