More of the same as markets continue to guess
Wednesday 11 May 2022
Markets in a bit of a rut right now amid all the second-guessing with economic and geopolitical uncertainty playing out still. Fx pairs ranging amid variable risk tones but still fragile overall.
Equities are looking firmer this morning, with Gold and oil off their lows too. Some softer USD tones but underpinned still as US bond yields retreat ahead of CPI data at 12.30 GMT.
For new and older subscribers alike I repeat my view that it's still a case of not over-analysing but keeping your focus on price action in core and cross-pairs.Continue to identify ranges and what levels present value for money. Algos will continue to knee-jerk price action on the variable headlines. Discipline is key as ever.
GBPUSD: Tighter two-way business in the past 24 hours. Some jobbing pips banked and I remain poised to sell rallies as ever.
EURGBP: Holding 0.8530 in the retreats but equally can't get back over 0.8580-85. I expect dip demand to continue albeit rally sellers poised amid uncertain EUR/ECB outlook.GBPJPY: Still holding 160.00-20 but now 160.80-00 prviding good supply amid the variable risk and USD tones.
EURUSD: Finding a base at 1.0520 now and rallying as I type to post 1.0560 amid some generally softer USD and rate hike/APP noise from the ECB. Some caution required still with good dip demand on the crosses too.USDJPY: Struggling to rally past 130.50 amid softer USD and fragile risk tones but equally still finding support into at 129.80 in the latest retreat.Good two-way expected.EURJPY: Support at 137.00 still as the Euro finds general dip demand as does USDJPY but 137.50 area now capping
USDCHF: Support at 0.99900 being tested again after failure above 0.9950 and with EURCHF retreating as CHF demand outstrips that of EUR for the moment but with the SNB never far away.Sellers remain poised as the uncertainty continues.EURCHF:Failure above 1.0500 yesterday sees a test of 1.0450 as I type with the SNB lurking in the dips. Rally sellers poised around 1.0500 again as I highlighted yesterday.
AUDUSD: Another retreat and a test of 0.6900-10 after after a rally failure at 0.6980 but now pushing higher amid the general USD supply. GBPAUD testing 1.7650 from 1.7750 as AUDUSD rally outstrips GBPUSD. NZDUSD holding 0.6275 and now looking at the pivotal 0.6350 again. GBPNZD testing 1.9500 now after finding a cap above 1.9600 but ranging tightly after recent fun and games. USDCAD: Found a base at 1.2960 but capping at 1.3035 amid some firmer oil/softer USD tones and retreating to 1.2975 as I type.Still looking underpinned for the moment but more option interest today in play.
Let's continue to be careful out there.
Interbank rates: 08.50 BST