Risk appetite underpinned again
Monday 17 January 2022
Equity and commodity markets have found the usual dip buyers and that's brought with it some risk-on JPY supply with USDJPY leading the way back up to post highs of 114.55 before retreating. Mixed tones on the Greenback generally but commodity currencies finding a bit of support as another week gets underway.
US markets closed today for Martin Luther King Day and little by way of economic data but latest BOJ decision/rhetoric due tonight/tomorrow.
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: 1.3700 support broke on Friday and now becomes immediate resistance after a good hold of 1.3650.
EURGBP: Still ranging tightly with the strong 0.8330 support area underpinning again but equally still failing around 0.8360 and helping to underpin GBPUSD. Should continue to see good two-way buiness. GBPJPY: 156.00 support broke on Friday as USDJPY extended its retreat amid the risk-off tones buta good hold of 155.50 and now testing 156.50 as USDJPY rallied off its lows on Friday helped by firmer USD and some risk-on JPY supply.
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: 1.1400 support now after retreatijg from 1.1480-85 where we had that decent size option interest on Friday. USDJPY: A good hold of 113.50 and now back up to 114.50 on firmer USD and JPY selling.
EURJPY: 130.40 support broke on Friday amid the extended USDJPY fall but now 129.80 providing a line for the moment.Sellers lurking at 130.80-00 again. USDCHF: 0.9100 still providing some support with the SNB shadow ever present but failing at 0.9160 as EURCHF struggles to rally too far for the moment. EURCHF: SNB ever vigilant but failing above 1.0450 and now testing 1.0420.
AUDUSD: Solid retreat on Friday but holding 0.7200 for the moment as commodity currencies generally feel some love this morning. USDCAD: 1.2470 support on Friday before a test of 1.2570 amid the softer oil/firmer USD flows once those 1.2525 options were out of the way but the reverse true this morning as commodity currency support sees a cap at 1.2550 and retreat toward 1.2500..
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.15 GMT