Storm arrives as Putin launches attack
Thursday 24 February 2022
Calm before the storm was my headline yesterday and sadly my base view for a long time now that we live in an ever-fragile world has sadly been confirmed by Putin launching attacks into Ukraine on a justification of self-defence. The Western alliance will of course impose greater sanctions and supply some form of aid to Ukraine but where this ends is anyone's guess.
Risk sentiment has turned sour again of course with equity markets collapsing, as has the Rouble to all time lows verus the Greenback with Russian stock markets losing 40% as I type. JPY and CHF safe-haven supply notable again amid some general USD demand. I've been highlghting that Gold and Oil have remained underpinned thoughout this recent/ongoing crisis and we've now seen the $1915-20 resistance area break to test $1950 while Brent Crude has just posted $101. A reminder that month-end flow signals also point to some USD demand to add to the mix. Meanwhile conjecture over Central Bank rate hikes also continues to add more uncertainty into the mix.
GBPUSD: Finding a hold of 1.3430 as I type after breaking down through the 1.3540-50 support helped by the USD demand/GBPJPY and GBPCHF supply. EURGBP: Uncertain times helping to contain as core pairs retreat and we're seeing a range of 0.8310-60 atm. GBPJPY: Finding support at 154.30 for the moment after the risk-off retreat. Caution still required atm amid Ukraine uncertainty. Sellers poised 155.00 and 155.50 now.
EURUSD: A good hold of 1.1200 now after falling through 1.1250 and some pips banked along the way.Now back up to test 1.1250-60 pivot area amid some mixed risk and USD tones this morning. Large option interest today now very much in play. USDJPY: Support around 114.40-50 again after another cap at 115.20 and some pips banked. A classic example of focussing on price and actions and prevailing range.EURJPY: Finding demand/support around 128.50 after the break of 130.00 triggering stops but rally sellers poised still amid variable EUR sentiment currently being seen. USDCHF:Yesterday's large 0.9200 option interest did little in the end to contain amid the bigger picture playing out and we've fallen to test 0.9170 amid the general CHF demand. Sellers still poised 0.9220-30. EURCHF: That temporary base at 1.0400-20 collapsed amid the risk-off CHF demand and we've been down to 1.0280-00 with SNB powerless to control markets forces but still keeping a close watch/assistance and now back to 1.0350
AUDUSD: Commodity currency strength gave way to risk-off AUDJPY and AUDCHF supply along with the general USD demnd and we've seen a steady fall into the 0.7160-80 support area again. USDCAD: A good hold of 1.2680 yesterday before a steady rally to now post 1.2814 as I type amid the softer risk CADJPY and CADCHF selling and firmer USD tones despite oil rallying too.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.17 GMT