Round and round we go again
Tuesday 5 July 2022
Mixed risk tones still as the week gets fully underway after the US Independence Day hols but softer again this morning. Equities in retreat again after a decent rally with Gold off its highs too after a strong rally on Friday and oil price coming lower again but underpinned still. USD demand overall again with renewed EUR supply notable too.
The RBA earlier today duly raised rates by 0.5% and AUD pairs have duly seen the buy rumour/sell fact scenario play out with nothing additionally hawkish in the statement which suits my strategy of course. EUR pairs are a little wobbly again amid the softer risk tones and ECB comments suggesting 0.25% hike is the best markets can hope for this month as well as Russian threat on gas supply. Today the BOE publish latest Fin Stability report at 09.30 GMT and MPC dove Tenreyro speaks at 16.30 GMT.
Be ready with your preferred levels/strategy, place orders and let the algos do the heavy work. Discipline is key as always but equally hesitation can often ruin a great idea.
GBPUSD: Duly capping around 1.2150 and now 1.2075 as I type on the softer risk GBPJPY supply and USD demand overall. I remain poised to sell rallies. Timing as ever is crucial. EURGBP: A cap this time at 0.8620 amid the general EUR supply and testing decent support around 0.8580 again as jury remains out and plenty of second-guessing of the ECB and BOE still. Great two-way pips as I've been highlighting for a while now. GBPJPY: Extended rally yesterday amid the better risk tones and USDJPY demand but capping into 165.30 this time and now back below 164.00 amid the softer risk tones. I think the variable sentiment will help provide good two-way pips still for the moment.
EURUSD: Capped into 1.0450 again and a sharp retreat this morning amid the general EUR supply to test 1.0330 in hurry as I type. Ukraine and ECB still remain the elephants in the room. USDJPY: Capped around 136.35 this time and now 135.75 amid the softer risk tones.Some dip demand still expected for the moment.EURJPY: Sharp retreat from 142.20 this morning to post 140.30 as I type amid the general EUR supply and softer risk tones returning. Rally sellers poised still when sentiment turns softer so I hope the steer has helped. USDCHF: Support at 0.9580 now as EURUSD retreats but EURCHF slide tempering gains through 0.9630 so far. Sellers poised into 0.9630-50 still. Jury remains out on SNB and amid variable risk but CHF still in demand as further tightening expected and yesterday's CPI data above forecast.EURCHF: Capped at 1.0050 then 1.0030 and now through 0.9950 amid the softer risk and EUR supply double-whammy. Support at 0.9920-30 but sellers will remain poised still as I've been warning.
AUDUSD: The post-RBA rally capped into 0.6900 and now testing decent support at 0.6800 again amid AUDJPY supply and wobbly metals price still. GBPAUD rallying to 1.7750 from 1.7600 in a straight line in the post-RBA/ softer risk AUD supply. NZDUSD also in rapid retreat and testing 0.6150-60 support after capping around 0.8225. GBPNZD bids into 1.9450 now after breaking down through 1.9500 again but now testing 1.9575 on the extended NZDUSD retreat.USDCAD: Holding 1.2840 in latest retreat and a sharp rally this morning to look at 1.2920 amid some CADJPY supply and general USD demand double whammy but sellers still poised.
Let's continue to be careful out there and have a top weekend.
Interbank rates: 08.42 BST