Wobbly risk tones and firmer Greenback prevail
Monday 9 May 2022
A new week but same soggy story with fragile risk sentiment amid Putin'S Victory Day parade, rising bond yields and a general reality check, as if any were needed, of what a very uncertain world we live in both geopolitcally and economically.
Equities are softer, as are Gold and oil while the firmer USD continues to play out too but a few sellers re-appearing as I type, mainly some profit-taking on the extended moves.
For new and older subscribers alike I repeat my view that it's still a case of not over-analysing but keeping your focus on price action in core and cross-pairs.Continue to identify ranges and what levels present value for money. Algos will continue to knee-jerk price action on the variable headlines. Discipline is key as ever.
GBPUSD: A period of some relative consolidation after the big falls post-BOE before a further drop to new lows of 1.2262 not seen since 2020. Pips banked and I remain poised to sell rallies as ever. EURGBP: Holding 0.8525 in the retreat from 0.8590 and I expect dip demand to continue albeit rally sellers poised amid uncertain EUR/ECB outlook. GBPJPY: Still holding 160.50 and now 160.75 this morning as core pairs find some dip demand. Sellers will remain poised.
EURUSD: Holding 1.0480-00 yet again but capping at 1.0530 so far.USDJPY: Finding a base now at 130.50 as USD demand prevails but tempered by some risk-off JPY demand. Good two-way expected still but I like the cheeky rally-sell when momentum fades.
EURJPY: Support at 137.50 now till as the Euro finds general dip demand as does USDJPY but 138.00 area still capping
USDCHF: Support now at 0.9850 per recent trend amid generally firmer USD tones and with EURCHF finding more dip demand with the SNB never far away. EURCHF: A good hold of 1.0380-00 this time with the SNB lurking in the dips and core pairs finding good dip demand despite the soggy risk tones so rally sellers poised still.
AUDUSD: Another retreat and now breaking down through 0.7000 as I type amid the USD demand and some general risk-off commodity currency supply.GBPAUD holding 1.7300 as AUDUSD retreat outstrips GBPUSD too and now back to test 1.7550. NZDUSD now down through 0.6400 and posting 0.6340 in its own extended retreat after capping at 0.6420. GBPNZD holding 1.9200 after finding a base below 1.9150 and now steady rally to 1.9360. USDCAD: Finding a base at 1.2850 and steady rally to 1.2950 amid the softer oil/ firmer USD combo. Some two-way business still expected amid all the fickle market tones but looking underpinned for the moment.
As we look at trading opportunities it's even more important not to over analyze but trade the price action with discipline and patience. I can help with this in my 1-2-1 sessions and now is the time, more than ever, to get on board with those if you haven't already done so.
Let's continue to be careful out there in all things. Have a good week everyone.
Interbank rates: 08.52 BST