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  • Mike Paterson

US inflation data in focus

Tuesday 13th December 2022

It may be the bigger risk of Central Banks tomorrow and Thursday but today brings the key US CPI data at 13.30 GMT and we can expect plenty of volatility in addition to the usual algo-led variety as markets dissect the detail and second-guess the Fed. Softer reading expected but after Friday's PPI that's a dangerous assumption.

The last 24 hours has seen mixed USD tones but equities have had a rally as has oil and gold is consolidating still albeit off its recent highs. China's COVID relaxtion measures still have analysts out on whether that's a positive or negative for sentiment and the global economy at large given the inevitable rise in cases being seen/expected further Geopolitical risk in Ukraine still lurking too. UK jobs/wages data earlier was another set of unconvincing figures overall. GBP traders should be aware of the BOE FSB report at 10.30 GMT and Bailey speech 11.00 GMT.

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.

GBPUSD: A good hold of 1.2240 now but equally failing to break up through 1.2300 while the jury remains out understandably and a perfect rinse n repeat scenario to take advntage of. Good two-way business whatever your bias and I remain poised to re=sell. EURGBP: Support line at 0.8580 re-appearing after capping at 0.8610 this time. Good two-way action still as I've been expecting/highlighting. GBPJPY: A cap at 169.30 this time but equally now holding the old 168.50 reistance line as core pairs both ranging again. I would still expect two-way business as markets remain ever-fickle.

EURUSD: A decent hold at 1.0510-20 this time after a solid cap at the old 1.0580 resistance line. USDJPY: A solid hold of 137.00 this time and a break up through 137.20-30 offers/res to signal further rapid rise to test 138.00 as some general USD demand returned but expect demand into 137.20-30 again, US CPI data notwithstanding.EURJPY: 144.50 res/offers finally broken as core pairs find dip demand amid the better risk tones but now capping at 145.30. USDCHF: Capping into 0.9380 again yesterday and this morning amid some softer USD tones returning and with traders still looking at SNB tightening/hawkish tones this week but holding 0.9320-30 still amid EURCHF bouncing again with SNB ever-vigilant. EURCHF: A hold at 0.9850 this time but capping above 0.9880 again amid hawkish SNB expectations and we continue to range.

AUDUSD: Good support around the old 0.6740 resistance line still after the failure between 0.6780-00 again and some good two-way pips here too whatever your bias. NZDUSD still capped between 0.6400-25 where we also have large option interest tomorrow but holding 0.6375-80 support again. USDCAD: Capping at 1.3680 on the firmer oil price story this time but holding 1.3600 so far.

Let's continue to be careful out there.

Interbank rates: 08.35 GMT

GBPUSD 1.2247

EURUSD 1.0539

EURGBP 0.8604

GBPEUR 1.1620

GBPJPY 167.62

GBPCAD 1.6721

GBPCHF 1.1494

GBPZAR 21.7150

GBPHKD 9.5428

USDJPY 136.87

EURJPY 144.24

EURCHF 0.9853

EURHKD 8.2123

AUDUSD 0.6772

NZDUSD 0.6392

USDCAD 1.3657

USDCHF 0.9347

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