Wednesday 20 September 2023
Yes folks, USD demand still prevailing amid firm US bond yields as markets wait on today's US Fed interest rate decision with expectations of a pause but room being left in the strategy to hike again if needed. BOE tomorrow and BOJ Friday rate/policy decisions also in focus. Some Euro demand still notable and USDJPY has finally broken above 148.00. UK inflation data out earlier showed a small retreat as expected but making tomorrow's BOE 25bps rate hike slightly less of a certainty and we've seen some more GBP supply accordingly.
Equities fell then rallied again in NY trading and off Asian lows as European trading gets underway. WTI remains underpinned overall but capped into $92.50 and in retreat on technical correction to $89.40 as I type. Gold finding support around $1925-30 still after failing to make headway above $1935 with natural sellers still poised and tight range prevailing. Geopolitical concerns still very much a threat to market stability with focus on increasing Ukraine/Russia tension but also the Middle East among other areas of conflict.
GBPUSD: 1.2400 providing the cap again atm but holding 1.2335 and back to 1.2370 as I type with decent option interest in play today at 1.2350-1.2400 helping to contain range. Keeping core shorts still and I remain poised for rally re-sells. BOE tomorrow in focus. EURGBP: Holding 0.8610-20 still and a sharp rally to 0.8660 on the softer UK inflation data plus some ongoing EUR demand on the rising EZ bond yields. More two-way expected overall but hanging on BOE tomorrow. GBPJPY: Capped at 183.20 still but holding 182.40 post UK CPI data. Sellers ever poised as I've been warning amid the fragile risk tones too.
EURUSD: A hold of 1.0675 again amid the general EUR demand and some USD supply returning this morning after capping into 1.0720 yesterday. I remain a rally seller overall. USDJPY: A good hold of 147.60-70 this time again amid the general USD demand and now finally up through 148.00 but capping into 148.20 amid fears of MOF/BOJ intervention. I remain a rally seller as preferred side overall at these elevated levels but with patience a virtue as ever.
More detailed analysis across a variety of pairs and 1-2-1 mentoring sessions for traders from mike@mspfx.co.uk
Interbank rates: 08.50 BST
GBPUSD 1.2356
EURUSD 1.0690
EURGBP 0.8650
GBPEUR 1.1560
USDJPY 148.13
GBPJPY 183.00
GBPCAD 1.6638
GBPCHF 1.1098
GBPZAR 23.4148
GBPHKD 9.6362
USDCHF 0.8972
EURCHF 0.9592
EURHKD 8.3359
AUDUSD 0.6458
NZDUSD 0.5937
USDCAD 1.3447
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