Markets still second-guessing
Friday 5 August 2022
Mixed risk sentiment agin this morning with equity markets once more off their highs, gold underpinned while oil is in retreat again as the jury remains out.Oil prices moved lower later in the NY session, and hit pre-Ukraine/Russia war levels due to rising supplies and weaker-than-expected demand continuing to weigh on market sentiment.
Yesterday the Bank of England duly hiked rates by 0.5% but with a stark warning of recession on the way which will not surprise my readers here and we saw the Pound fall across the board only to recover some poise against a softer USD later in the day. Today sees the latest US jobs n wages report but should have limited impact ahead of next week's inflation data.
As always, don't over-analyse but be ready with your preferred levels/strategy, place orders and let the algos do the heavy work. Discipline is key as always but equally hesitation can often ruin a great idea.
GBPUSD: Capped around 1.2200 again and fell to test 1.2060 in the extended retreat post-BOE before a bounce later in the day but failing into 1.2180. I will stand poised for more of the same as we continue to range.EURGBP: Another good hold of 0.8350 where we have decent option interest today and a strong rally amid the GBP sell-off post-BOE but failure into 0.8440. I still think we'll see two-way pips jobbing opportunity.GBPJPY: A slump into 161.00 from 164.00 post-BOE and now capped around 162.25 amid softer GBP and fragile risk tones.
EURUSD: Support at 1.0160 this time and currently 1.0210-20 but rally sellers including me still poised as we cap into 1.0260 so far. Option interest in play again today. USDJPY: Capping int0 134.50 again and drifted lower to test 133.00 before another knock lower in Asia from the model sellers but holding 132.50 this time and a bounce to 133.48. Option interest in play should we rally strongly. EURJPY: Forming a base around 135.75-80 for the moment but capping into 136.50 with sellers poised still whenever risk turns amid general EUR weakness.USDCHF: We've support now back at the old (Wednesday) 0.9540 area after yesterday's softer USD-led fall from 0.9620. SNB will be keeping an eye on things as ever as EURCHF finding decent support EURCHF: Another hold of 0.9760 with SNB watching/smoothing before another rally since to look at 0.9800 but sellers prevailing amid the variable risk and EUR weakness overall.
AUDUSD: Support back in at 0.6940 amid yesterday's USD fall and testing 0.6980 but capping for the moment. Option interest in play. GBPAUD capping at 1.7500 this time but holding 1.7420 so far.NZDUSD holding 0.6280 this time amid the softer USD tones area yet again but failing into 0.6320. GBPNZD holding 1.9150 in the extended retreat after capping at 1.9350 on the stronger NZD/softer GBP post=BOE.USDCAD: Testing 1.2880-90 again after holding 1.2820-30 amid oil price retreat. I expect some good two-way business still overall amid the variable risk/oil and USD tones. Decent option interest in play again.
Let's continue to be careful out there and have a top weekend. Football returns for me with a trip to my Hallowed Hall in Southend. Come on you mighty Shrimpers !!
Interbank rates: 08.36 BST