Round and round and up and down, and up, we go again
Monday 7 November 2022
Lots of strange moves since Friday's US NFP data which came in strong but we saw lots of USD supply amid some roller coaster price action. Market chatter about positive vibes out of Ukraine/Russia war (not materialising so far) and China relaxing COVID lockdown rules (vehemently denied) have both added to the conjecture and after the Greenback gapping higher on the Asian opening we've seen some further supply in a rush as I type as European trading gets fully underway.
Global equity markets and oil have have rallied off their lows this morning with Gold capping above $1680 after Friday's strong rally. Geopolitical risk still very much in the mix too though along with the US mid-term elections. Data focus this week will be US CPI on Thursday but plenty of CB speakers on the slate too. Ovenight Chinese trade data was soggy. US and Canadian clocks went back 1 hour this weekend.
GBPUSD: A solid hold of 1.1150 again on Friday and now testing 1.1400 after a hold into the key 1.1280-00 area this morning . I remain a rally seller overall.EURGBP: Underpinned at 0.8700 on Friday but failing above 0.8785 this morning and a decent retreat as I type to 0.8738 amid some renewed GBP demand as GBPUSD rallies strongly through 1.1400. I expect the two-way business to continue. GBPJPY: A solid hold of 165.00 on Friday and now 166.50 this morning as the GBP demand and better risk tones drive the pair to 167.80 as I type. I would still expect
EURUSD: Breaking back up through parity now amid the USD supply after a decent hold of 0.9900-30. Should still see some good two-way business amid the variable USD tones. Cross flows, risk, Ukraine all in the frame. USDJPY: Capping 147.50 after Friday's hold of 146.50 and heading back down there again now amid the USD supply but supported a little by some better risk JPY selling too. Intervention threat still.EURJPY: Supported this time at 145.50 then 146.00 and a solid rally to 146.50 this morning but sellers will remain poised. USDCHF: Capping on Friday at 1.0100 and that solid USD supply sent it hurtling down below 0.9950 where we are again this morning amid the renewed USD selling after capping at 1.0025. Some solid EURCHF dip demand into 0.9880 and SNB never far away also both in the mix to lend support still. EURCHF: Capping around 0.9920 as USDCHF sellers prevail again but SNB will still be keeping an eye. Support noted between 0.9860-80
AUDUSD: Forming a base around 0.6400 now after Friday's strong rally and again this morning amid the renewed USD supply. Large option interest rolling off nearby today and tomorrow. NZDUSD also rallying amid the softer USD afer a good hold of 0.5850 and now posting 0.5925. USDCAD: Now breaking down through 1.3500 after capping at 1.3550 amid the USD supply and with oil off its lows.
Let's continue to be careful out there.
Interbank rates: 08.30 GMT