Greenback under pressure still
Thursday 13 January 2022
Equity and commodity markets in bullish mood still but it seems that markets are now a little tired of the Fed and unloading a few more USD as the expectations of rate hikes/policy normalisation become fully factored in.
For GBP traders still keep your eye on the developing storm regarding PM Johnson and lockdown parties despite his "apology" yesterday. The enquiry is still in progress and this latest debacle isn't going away any time soon.
As always, don't over-analyze or second-guess but keep your focus on price action in core and cross-pairs and identify recent ranges to see whether we hold or break and what levels present value for money. Patience will invariably be a virtue but don't confuse patience with being stubborn.
GBPUSD: Strong 1.3650 resistance now history amid the USD supply/GBPJPY demand double whammy and posting 1.3745 highs.Caution still required for GBP sellers. EURGBP: Ranging still and holding the strong 0.8330 support area again but equally still failing between 0.8350-60 again. Should continue to see good two-way buiness. GBPJPY: 157.00-20 support holding again after a test of the larger interest at 156.80 that I highlighted here yesterday amid the firmer risk tones but tempered by USDJPY retreat.
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: 1.1400-20 support now amid the softer USD tones and squeezing some shorts helped by EURCHF and EURGBP both underpinned in the dips. USDJPY: Now capped at 115.00 but holding 114.30 so far and still helped by the risk-on JPY supply. EURJPY: 130.80-00 support still amid ongoing firmer risk JPY supply but sellers lurking now at 131.50. USDCHF: 0.9220-30 support now history and testing 0.9120 amid the USD selling and helped by EURCHF failing above 1.0500 still but with the SNB shadow ever present. EURCHF: SNB ever vigilant but the pair failing above 1.0500 still and now testing 1.0460.
AUDUSD: Firmer risk AUDJPY demand and stronger commodity prices still helping to underpin and now up through the strong 0.7275-80 resistance to post 0.7310. Support now coming in at 0.7275-80. USDCAD: Retreating further still to 1.2480 amid the firmer oil/softer USD flows with CADJPY demand in play still. Sellers poised 1.2525 where we also have larger option interest tomorrow. Support into 1.2450.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.53 GMT