Round and round we go
Wednesday 24 November 2021
More of the same in the past 24 hours with variable but mostly underpinned USD and risk tones. Oil prices are firmer too shrugging off Biden's release of reserves which had largely been factored in.
RBNZ has raised rates by 0.25% as widely expected but didn't go the full 0.5% this time preferring to leave something in the locker. Cue NZD selling as the uber-hawks gave up, for the moment at least. Loads of US data out today then FOMC Minutes at 19.00 GMT as US traders head out the door for the Thanksgiving long week-end.
It's still a case of markets and traders second-guessing the central banks over inflation measures with fragile risk sentiment ever-lurking amid rising COVID cases in Europe and political unease around Ukraine, Taiwan and elsewhere. A fragile world out there still.
GBPUSD: A quick dip below the 1.3350 support yesterday but failing into 1.3400 since. The pair does remain underpinned by GBPJPY but some EURGBP dip demand still helping to cap as I type. EURGBP: A failure yesterday at 0.8425-30 (GBPEUR basing at 1.1865) now sees a test of 0.8390 (1.1915) amid some general EUR supply. GBPJPY: Sellers at 154.20 now prevailing but equally 153.50 providing decent support.
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: Support at 1.1220-30 in touching distance again this morning after failing at 1.1270 yesterday amid firmer USD and cross flows. USDJPY: Another strong rally yesterday amid the firmer USD tones and again this morning to test the 115.15-20 highs again after a good hold of 114.80. Good two-way pips still. EURJPY: 129.00 now providing support but with rally sellers poised into 129.50 still as core pairs continue to range. USDCHF: Support now coming in between 0.9300-20 amid firmer USD and with the SNB ever vigilant on EURCHF but sellers still lurking as EURCHF fails above 1.0500. EURCHF: 1.0480 now providing the new base with SNB shadow lurking. Sellers between 1.0500-20 should still hold this latest rally as I warned yesterday.
AUDUSD: 0.7200 still holding as we see general consolidation and some AUDJPY and AUDNZD demand but sellers poised still as we continue to range tightly. USDCAD: 1.2660 now holding amid firmer USD tones but failing around 1.2700 this time amid firmer risk/oil prices and hence some CADJPY demand again.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.16 GMT