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  • Mike Paterson

Rollercoaster ride as markets digest CPI and BOJ

Friday 13 January 2023

Yesterday's eagerly awaited US CPI data didn't disappoint in terms of volatility and we've seen some good two-way business again. Certainly some ranges broken with USDJPY stil leading the way amid the USD supply overall as markets work on just a 0.25% FOMC hike on 1st Feb versus the 0.5% that hawks had hoped for and Fed heads had pointed to previously.

Equities and WTI have had their own rollercoaster ride post-CPI but generally underpinned latterly while Gold has finally broken $1900 amid the USD supply and general uncertainty. Ukraine/Russia war continues to be the elephant in the room amid other geopolitical risk. Mixed UK GDP data this morning but with overall trend still soggy.

GBPUSD: Great two-way business whatever you preference and capping around 1.2250 now after holding 1.2080-00 again then 1.2150 in yesterday's volatility.I remain poised to re=sell per ongoing strategy but some caution still advised amid current USD supply. EURGBP demand initially and GBPJPY supply still helping to cap along the way. EURGBP: 0.8830-50 area still providing good support amid the general EURUSD demand but capping at 0.8900 this time and ranging still as core pairs make their mind up. GBPJPY: Falls tempered a little by some firmer risk tones but a steady decline to 156.60 from 158.00 amid the JPY demand and USDJPY's retreat. Rally sellers will be poised now again.

EURUSD: Underpinned between 1.0720-30 again with support through the crosses too and a solid rally to break through 1.0850 before running out of steam..USDJPY: Capped above 131.00 yesterday and we fell to look at 128.00. EURJPY: JPY demand helping to temper the EUR strength in this pair seen recently and We've been down to test 139.00 after capping at 140.30-50. USDCHF: Good two-way action post-CPI with 0.9260 holding but then capping at 0.9360 amid the USD supply returning and another test of 0.9260. Supported again by EURCHF testing 1.0100 amid the general EUR demand. EURCHF: Solid hold of 1.0030 and now 1.0050 as the EUR demand prevails plus some better risk tones but capping at 1.0100 so far. SNB will be ever vigilant.

AUDUSD: Good hold of 0.6900 but initially failing above the 0.6980 strong resistance and we saw another test of 0.6880 before the USD supply finally underpinned for a break higher. NZDUSD: Support coming in at 0.6340-50 again after a quick dip to 0.6920 post data but failing into 0.6420 this time.

USDCAD: Capped at 1.3460 on the softer USD/firmer oil double whammy and now down through the strong 1.3350 support but holding 1.3320 for the moment.

Traders can take advantage from my daily emails,(far more detailed than this summary aimed at my physical delivery clients), plus 1-2-1 mentoring sessions. for more details.

Interbank rates: 08.47 GMT

GBPUSD 1.2237

EURUSD 1.0856

EURGBP 0.8868

GBPEUR 1.1274

GBPJPY 157.00

GBPCAD 1.6314

GBPCHF 1.1344

GBPZAR 20.6044

GBPHKD 9.5020

USDJPY 128.31

EURJPY 139.24

EURCHF 1.0067

EURHKD 8.4278

AUDUSD 0.6985

NZDUSD 0.6405

USDCAD 1.3331

USDCHF 0.9277

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