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  • Writer's pictureMike Paterson

US Dollar demand returns but jury still out

Thursday 2 March 2023

Focus firmly back on the FOMC and with 10-year US bond yields on the rise again we've seen USD demand return albeit some supply appearing as European trading gets underway. Talk out of Japan is not helping JPY hawks still, for the time being at least, while the ECB remain constant in their view that higher rates are very much on the agenda still. Yesterday's comments from BOE's Bailey put the skids under the Pound again and the Greenback jury remains out as ever in these fickle and fragile times.

Equities have seen another solid retreat but heading north once again as I type this morning while WTI is also off its $76.25 lows again and testing $78.00 as I type. Gold has found support at $1830 now but equally capping into $1845 as the tight ranges continue amid the global uncertainty. Ukraine/Russia war continues to be the main geo-political elephant in the room.

Remember, focus on the price action and let the algos do the heavy lifting/dropping. The important thing is to identify your preferred risk/reward entry/exit levels prior and be poised to execute.

GBPUSD: A decent hold of 1.1950-60 so far in the retreats amid the general USD demand but now capping at 1.2020 on the bounce and I remain a rally seller but caution still required at these lower levels. EURGBP: Bursting up through the pivotal 0.8820 yesterday to test 0.8900 amid the GBP supply and now holding 0.8850-60 in the retret. Expect some more two-way trading as core pairs fluctuate. GBPJPY: A support line now forming at 162.80-00 but sellers still poised as the uncertainty continues and capping into 164.00.

EURUSD: Holding 1.0620-30 helped by some decent option contract interest today after failure at 1.0680 and I remain a rally seller as my preferred side still. USDJPY: Capping around 136.85 again in the latest rally but equally holding 136.00-20 in the dips.Poised to re-sell still when momentum fades as I continue to favour being long JPY on the crosses too overall.

Plenty more to read in my full report and more detailed update for traders plus my 1-2-1 mentoring sessions. Mail for more info.

Interbank rates: 08.45 GMT

GBPUSD 1.1985

EURUSD 1.0635

EURGBP 0.8873

GBPEUR 1.1270

USDJPY 136.42

GBPJPY 163.51

GBPCAD 1.6320

GBPCHF 1.1289

GBPZAR 21.7248

GBPHKD 9.3480

EURCHF 1.0016

EURHKD 8.2946

AUDUSD 0.6742

NZDUSD 0.6227

USDCAD 1.3607

USDCHF 0.9418

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