Tuesday 5th April 2022
Central banks still very much in focus as atrocities sadly contiinue in Ukraine and the RBA have now added hawkish tones amid the surging inflation report as I warned yesterday.Markets now pricing in plenty of 0.25% rate hikes from June/July and the Aussie Dollar has rallied strongly.
Comments from BOJ's Kuroda saw an initial drop in USDJPY with the algos picking up on vague intervention references but those losses have since been recovered in equally rapid fashion. Euro pairs remain on the back foot but seeing some usual dip demand. Equities and gold remain underpinned as does oil.
Algos will continue to knee-jerk price action on the variable headlines as forex markets remain ever-fickle.
GBPUSD: Found a cap into 1.3150 again after finally breaking up through the 1.3120-30 offers I was tweeting about yesterday and some more re-sells duly made per ongoing strategy after pips banked in the initial retreat at 1.3105. I remain a rally seller overall while keeping an eye on EURGBP and GBPJPY as always.EURGBP: A solid retreat to 0.8350 and helping to underpin GBPUSD per my tweets yesterday. I would still expect some more dip demand down here. GBPJPY: Finding support at 160.50-60 in the Kuroda-led retreat and now back up through 161.20 as JPY supply returns with USDJPY dip demand notable again.
EURUSD: A further retreat through 1.1020 then 1.0980 on the generally softer EUR tones and firmer USD has seen a test of 1.0960.USDJPY: Holding 122.40 in the latest retreats but failing at 123.00 in the reversal so far.EURJPY: Support now at 134.50 in the latest retreat yesterday amid the general EUR decline but failing around the previous 135.20 support line in the subsequent rally so far. USDCHF: Support coming in at 0.9245-50 again but capping again at 0.9270 with EURCHF falling further to test 1.0150. EURCHF: 1.0200 support is history now and a test of 1.0150 as I type amid the general EUR weakness with the SNB seemingly unable to do much to stop the rot. Sellers poised still.
AUDUSD: A good hold of 0.7500 then 0.7520 yesterday as markets waited on the RBA and the bulls got their due reward on the hawkish tones that I warned about by referencing the surging inflation report yesterday. NZDUSD also rallied from 0.6945 but capped into 0.7000 as I type. USDCAD: 1.2480 support now gone as oil rallies from its lows and some CADJPY demand returns but more bids lurking into 1.2450. 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.
Interbank rates: 08.47 BST
GBPUSD 1.3127
EURUSD 1.0980
EURGBP 0.8362
GBPEUR 1.1940
GBPCAD 1.6347
GBPCHF 1.2156
GBPZAR 19.0760
GBPHKD 10.2283
USDJPY 122.85
EURJPY 135.00
EURCHF 1.0163
EURHKD 8.5664
AUDUSD 0.7627
USDCAD 1.2457
USDCHF 0.9255
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