Yen supply notable still amid firmer risk and Greenback tones
Monday April 4th 2022
Friday's US jobs and wages report came in bullish enough to keep a 50bps US rate hike in May and probably June underpinning the Greenback and JPY supply continuing albeit in tight ranges still.Equities and gold are off their lows again as is oil after Friday's saw a rally from the over-extended US reserves-led retreat only to fall again as the roller-coaster ride continues.
Putin seems indeed to now be focussing his attention in south and east Ukraine with reports of shelling of Odessa even as Zelensky claims victory around Kyiv. Central banks still very much in the market mix with the EBA next up the ramp tonight (Tues 5th) and they will have seen today's high inflation data to consider. BOE's Cunliffe speaks today 15.00 BST but expecting some comments from Bailey before that 10.05 BST.
GBPUSD: Found a cap at 1.3150 and some re-sells duly made per ongoing strategy and pips banked in the retreat at 1.3100. I remain a rally seller overall while keeping an eye on EURGBP and GBPJPY as always. EURGBP: A further retreat helping to underpin GBPUSD and testing 0.8400 but holding so far. I would still expect some more dip demand down here. GBPJPY: Finding support at 160.30-40 again in the latest retreat from 161.20 as JPY supply returns with USDJPY dip demand notable again.
EURUSD: A retreat through 1.1050 on the generally softer EUR tones and firmer USD has seen a test of 1.1020 and as we continue to trade tightly. USDJPY: Holding 122.25-30 in the latest retreats but failing at 122.80 so far. EURJPY: Support still at 135.00-10 but failing around 135.70-80 again we continue to range. USDCHF: Support coming in at 0.9240 now again after the cap at 0.9270 with EURCHF holding 1.0200 still. SNB shadow lurking amid the fragile backdrop. Sellers poised 0.9270 and 0.9300 still. EURCHF: A further hold of 1.0200 after the 1.0240 failure amid the general EUR weakness with the SNB seemingly finally putting a line in down here. Sellers poised still though.
AUDUSD: A good hold of 0.7480 since my last update but equally failing at 0.7520 again this morning so far as we continue to range. NZDUSD capped into 0.6950 this time but holding 0.6900-10 still and now testing 0.6930-40 again in the latest rally. Bids into 0.6900-20 and 0.6875 still then 0.6850. Sellers 0.6950-60 thenh 0.6980-7000 again. USDCAD: Holding 1.2480 on Friday and again in the current retreat from 1.2520 as I type as oil rallies from its lows and some CADJPY demand returns. Two-way business still expected amid all the uncertainty.
Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good week everyone.
Interbank rates: 08.41 BST