Friday 26 January 2024
The ECB left interest rates on hold as widely expected but with some dovish tones in the rhetoric and that's seen EUR supply again while across the pond strong US GDP data gave the Greenback a lift but tempered by softer Durable Goods at the same time which brought some fun n games and rapid moves ensuing. Japanese CPI came in softer than expected this morning which pushed back BOJ normalization expectations albeit briefly as the USDJPY rally was quickly reversed only to find dip demand as the jury remains out.
FX currency pairs still in second-guessing mode overall and ranging with mixed USD tones and early month-end signals pointing to modest USD supply. Meanwhile the Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Red Sea tensions still cast their own shadow. Markets will be keenly awaiting US PCE today at 13.30 GMT for further inflation indications.
Equities remain underpinned overall but off their further highs again amid a bit of profit-taking and the CB second-guessing still. WTI rallied again testing 2-month highs of $77.50 after holding $75.50 then $76.00 yesterday with sellers poised still and back below $77.00 as I type but Red Sea concerns, and technicals offering the greasy stuff some decent support again. Gold now capping at $2025 but support into $2010 as we continue to range tightly.
GBPUSD: Holding 1.2675-80 this morning after capping into 1.2750 resistance yesterday but with retreats tempered by EURGBP supply amid the dovish ECB tones. I remain poised for further sells when momentum fades while we continue to range. EURGBP: Capping around 0.8565 yet again but holding 0.8525 in the extended ECB-led retreat this time. Still looking soft with bests on BOE holding rates for longer.GBPJPY: Capping this time at 188.00 and a hold of 187.20-30 again amid the core pair and risk fluctuations. We can expect rally sellers to remain poised amid all the uncertainty in these ever fickle markets but still seeing some decent dip demand for the moment.
EURUSD: Support coming in at 1.0815-25 in the wake of the ECB fall-out after failure into 1.0900 resistance area. I remain a rally seller.USDJPY: Capping around 147.90 in the various rallies but holding 147.00 then 147.50 and I remain a rally seller as preferred side overall.
For more detailed analysis across a larger number of FX pairs email mike@mspfx.co.uk
Interbank rates: 08.15 GMT
GBPUSD 1.2688
EURUSD 1.0825
EURGBP 0.8530
GBPEUR 1.1720
USDJPY 147.78
GBPJPY 187.51
GBPCAD 1.7094
GBPCHF 1.1003
GBPZAR 23.9681
GBPHKD 9.8933
USDCHF 0.8668
EURCHF 0.9385
EURHKD 8.4413
AUDUSD 0.6581
NZDUSD 0.6095
USDCAD 1.3472
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