Friday 1 December 2023
All price action these days is relative compared to days gone by but November has definitely brough some decent volatility and yesterday was no exception. It's been another mixed bag in the past 24 hours with month-end USD supply prevailing into the 4pm London fix after some demand on the back of Fed's Waller and Daly producing less dovish tones than expected. We've also seen a further retreat in the Euro with softer CPI and growth data suggesting the end of rate hikes and bringing rate cuts next year firmly into play.
Yesterday's US PCE and weekly jobs data came in as expected and today the focus turns to Fed Chair Powell's speech at 16.00 GMT ahead of the Fed blackout period which starts tomorrow. The ongoing Middle East back-story sadly continues meanwhile and casts its own shadow over markets but still not driving prices.
Equities fell in NY amid the month-end flows but then rallied back into the close and higher in in early European trading. WTI capped at $79.60 and fell rapidly as markets expressed their disappointment at the OPEC+ outcome and that cuts would be voluntary before basing into $75.00 again. Rallies limited since with global demand concerns continuing. Gold has found a base at $2035 again but still failing into $2050 with strong technical resistance area just above.
GBPUSD: Holding 1.2600 in yesterday's extended retreat before rallying into the old 1.2665 line amid the month-end fix USD supply and EURGBP selling but still tempered by some GBPJPY supply. I remain poised for rally sells when momentum fades but caution still required for the moment. EURGBP: Support at 0.8600-05 being tested as I type amid the general EUR supply after capping at 0.8635. Jury still out but rate divergence in play for the moment. GBPJPY: Capping at 187.50 again this morning but holding 186.50 this time amid some core pair support still. Sellers remain poised.
EURUSD: Support now around the old 1.0880 support line after capping at 1.0950 and retreating on the general EUR supply still plus some USD demand returning. I remain a rally seller overall still. USDJPY: Capping at 148.50 in yesterday's extended rally but holding 147.60 in the latest retreats. I remain a rally seller as preferred side overall at these still elevated levels.
For more detailed analysis across a variety of pairs email mike@mspfx.co.uk
Interbank rates: 08.36 GMT
GBPUSD 1.2652
EURUSD 1.0895
EURGBP 0.8609
GBPEUR 1.1614
USDJPY 148.01
GBPJPY 187.31
GBPCAD 1.7103
GBPCHF 1.1067
GBPZAR 23.7053
GBPHKD 9.8543
USDCHF 0.8740
EURCHF 0.9523
EURHKD 8.4878
AUDUSD 0.6617
NZDUSD 0.6167
USDCAD 1.3531
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