Thursday 21 March 2024
In a week notable for a plethora of Central Bank decisions the anticipation continues with the US Fed tonight then SNB, BOE and Norges Bank tomorrow.Meanwhile the USD demand continues with USDJPY leading the way on a march up through 151.50 after a hold of 150.50 yesterday once broken and JPY supply once again notable in the wake of the BOJ disappointing a few hawks and better risk tones generally.
FOMC speculation seems centred around whether they will point to 2 or 3 rate cuts by year-end with consensus still on a first cut in June. Data highlight earlier was UK CPI which came in under expectations but will do little to alter the BOE decision tomorrow with markets pricing in an August rate cut. The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Hezbollah/Red Sea tensions still cast their own shadow.
Equities remain underpinned overall on the firm belief that interest rates will be generally coming down at some stage soon and steady again this morning. WTI has pushed higher again testing $83.20 this time after holding $81.80-00 amid the second-guessing on Red Sea/Gaza, CBs and global economy. Gold holding $2150 but capping at $2160 now as we wait on FOMC.
GBPUSD: Failure around 1.2730 yesterday and this morning after holding 1.2660-70 where we also have decent option interest today. I remain poised for further re-sells when momentum fades.EURGBP: Ranging still as the BOE/ECB debates continue and with BOE looming tomorrow. Options in play also helping to contain.GBPJPY: Holding 190.00 and the expected dip support once again helping with rally to 192.85 this morning as JPY weakens further post-BOJ and better risk tones. Sellers will remain poised amid MOF intervention conjecture but coming second atm.
EURUSD: Support around 1.0830 still but capping at 1.0875-80 again amid the general USD demand. I remain a rally seller as my preferred side. USDJPY: Holding 150.50 and a strong rally to 151.70 so far helped by the general USD demand and better risk tones. I still prefer to play from short-side but also still expecting dip demand for the moment albeit MOF/BOJ conjecture will increase the higher we go. FOMC also lurking.
Traders - For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email mike@mspfx.co.uk
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