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  • Mike Paterson

More of the same

Thursday 20 January 2022

Once again we've seen ups and downs in equities and oil with FX pairs ranging and markets still second-guessing central banks. BOE's Bailey yesterday suggested energy prioe-led inflation could be around for a while and that's given the rate hike hawks firmer belief but the Pound still going nowhere in a hurry albeit underpinned for the moment. This morning ECB's Lagarde said they do/will not need to be following the Fed on raising rates and recucing balance sheet.

UK PM Johnson duly swerved during PMQs using the ongoing investigation to buy some time to rally support, yesterday's defection by one of his MPs if anything galvanising his backers. He's still walking on egg shells though and this story will continue to play out.

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.

GBPUSD: A good hold of 1.3600 yesterday and 1.3620 in Asia after the failure into the sronger 1.3650 area after 1.3620-25 broke.EURGBP: Another hold below 0.8320 but sellers still poised into 0.8350 as I highlighted yesterday. GBPJPY: 155.40 support still but failing above 156.00 amid the mixed risk tones

EURUSD: Finding some dip demand at 1.1340 but equally failing to make topside headway through 1.1370. USDJPY: A good hold of 114.00 after sellers at 114.60 prevailed per my warning yesterday. EURJPY: 129.60 support being tested again after failing above 130.00 amid the mixed risk tones. USDCHF: 0.9140 still provding support with SNB ever vigilant amid the general EUR weakness but failing at 0.9170 as EURCHF remains around 1.0380. EURCHF: SNB ever vigilant and now holding 1.0375 but sellers poised still as Euro remains a little soggy generally.

AUDUSD: Now holding 0.7200 and pushed up through the decent 0.7220-25 resistance helped by that decent gold rally but sellers lurking 0.7250-60 prevailing. USDCAD: 1.2480-85 support broke yesterday to post 1.2445 amid some softer USD and firmer oil tones but a failure at our old 1.2520-25 line sees 1.2480 now being tested again.

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

Interbank rates: 08.47 GMT

GBPUSD 1.3628

EURUSD 1.1354

EURGBP 0.8330

GBPEUR 1.2002

GBPJPY 155.76

GBPCAD 1.7010

GBPCHF 1.2462

GBPZAR 20.8046

GBPHKD 10.6177

USDJPY 114.30

EURJPY 129.76

EURCHF 1.0380

EURHKD 8.8481

AUDUSD 0.7233

USDCAD 1.2496

USDCHF 0.9143

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