Wednesday 1 May 2024
A combination of month-end demand and stronger than expected US employment cost index data has sent the Greenback higher amid anticipation of a hawkish US Federal FOMC event later today. Will they allude to rate hikes as some analysts suggest? I'm not so sure but recent data and rhetoric points to a very cautious stance and hold for the moment with the jury very much out. As always we must trade the fact not the conjecture.
The Ukraine/Russia war and Middle East tensions still cast their own very large shadow too. Remember as always to identify your preferred risk reward levels and let the algos do their thing along with the natural and speculative flows. Don't get greedy or over-analyse. These are tight ranges and will produce regular jobbing opportunities therefore while the jury remains out.
Equities fell in NY on the hawkish Fed expectations but steadier in Asia/early Europe amid all the CB conjecture. WTI capped above $82.50 yesterday and dipped since to test $80.50 in the FOMC-led retreat but holding there so far this morning amid the ongoing variables. Gold has also tumbled amid the USD demand and firmer US rate-for-longer scenario and now testing $2280 in the extended retreat with profit-taking still on the agenda.
GBPUSD: Failing at 1.2550-60 and we've been down to 1.2465 as the USD demand returns. EURGBP: Capping into 0.8555 helped by the general EUR month-end supply flow I've been highlighting but holding 0.8535 so far as the ECB/BOE rate cut conjecture continues. GBPJPY: Holding 196.80-00 in the latest retreats and now posting 197.37 as some firmer risk JPY supply returns and USSJPY remains underpinned. Sellers will remain poised in these fickle markets.
EURUSD: Support around 1.0650 this morning after the USD demand-led/month-end outflow retreat with ECB conjecture a driver too and capping around 1.0730 still. USDJPY: A steady rally from 157.00-20 amid the USD demand and no intervention with renewed JPY supply too.
Traders - For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email mike@mspfx.co.uk
Comments