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  • Mike Paterson

Softer Greenback tones to greet a new week.

Monday 18 July 2022

Still seeing some good two-way business over all but some USD selling in Asia and early European trading picking up from Friday's later sentiment. Equities a little firmer with oil and gold also off their lows and that's helping temper USDJPY retreat again too with better risk tone JPY supply. FOMC blackout period now underway ahead of the 27 July announcement.

Focus will remain on the Italian political turmoil with PM Draghi reportedly determined to resign despite the rejection of the resignation initally by President Mattarella. Draghi is expected to give his next address on Wednesday. Should Mattarella call for a new election, it would have to happen within 70 days.

As always, don't over-analyse but 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: A good hold now of the old 1.1850 cap and now 1.900 providing the base for a decent rally amid USD supply to test 1.1970 this morning. I remain poised to sell rallies. Timing as ever is crucial.EURGBP: Capped above 0.8500 again but demand building around 0.8475-80 as jury remains out. I still think we'll see two-way pips overall. GBPJPY: Better risk tones underpinning at 164.30-50 but capping above 165.00 for the moment as the JPY/risk jury remains out.

EURUSD: A decent rally amid the softer USD tones but capping at 1.0150 but support building at 1.,0080-00 now after last week's hold of 0.9950. Ukraine, Russian gas supplies, ECB, recession and now Draghi remain the focus.USDJPY: A good hold of 137.80-85 again since failing around 138.50.EURJPY: Support around 139.50 as core pairs find dip demand and risk turns a USDCHF: Support at 0.9740 holding the extended softer-USD retreat after capping around 0.9780 with EURCHF slipping back but holding 0.9840-60. Jury remains out on SNB and amid variable risk but CHF still in demand as further tightening expected.

EURCHF: Holding 0.9840-60 in the latest retreats but capping into 0.9900.Some SNB support still I reckon but sellers prevailing again.

AUDUSD: A good base building 0.6780-00 and posting 0.6835 amid the softer USD/better risk tones with AUDJPY demand returning to support. GBPAUD currently trading 1.7450-1.7550 as core pairs range. NZDUSD capping into 0.6200 this time but holding 0.6150 in the retreat and having another USD/risk led rally. GBPNZD bids into 1.9200 holding the extended retreat and now 1.9300 providing a base as GBPUSD rally outstrips NZDUSD.USDCAD: A solid cap at 1.3150 then 1.3100 on Friday and falling to 1.2975 on the softer USD/firmer oil double whammy. Bids building into 1.2950 and I expect some good two-way business amid the variable risk and USD tones.

Let's continue to be careful out there and have a good week everyone.

Interbank rates: 09.15 BST

GBPUSD 1.1930

EURUSD 1.0124

EURGBP 0.8482

GBPEUR 1.1789

GBPJPY 164.85

GBPCAD 1.5496

GBPCHF 1.1671

GBPZAR 20.4010

GBPHKD 9.2934

USDJPY 138.00

EURJPY 139.80

EURCHF 0.9864

EURHKD 7.8832

AUDUSD 0.6827

USDCAD 1.2988

USDCHF 0.9745

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