Friday 12 April 2024
The ECB yesterday left interest rates on hold and suggested they weren't averse to rate cuts soon and we've seen the Euro weaken further although the price action at the time was limited. USD demand has also seen USDJPY bounce back up through 153.00 to post new 35-year highs but some softer risk tones has seen JPY demand once again help cap core pairs too.
More noise overnight from the Japanese MOF/BOJ as expected but so far it's still just that. Noise. Intervention fears will persist but no evidence of it as yet although Fin Min Suzuki hinted that FX will be on the agenda at next week's G20 summit. US PPI data out yesterday came in under expectations which did provide a Greenback wobble but not for long. Not much on the data slate today apart from Michigan Consumer Sentiment but Fed head speakers feature Schmid, Bostic and Daly.
The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Hezbollah/Red Sea tensions still cast their own shadow with threats of direct retaliation from Iran still adding to the fragile risk tones.
Equities have been down and up and down but currently steadier in early European trading as jury remains out while WTI has traded tightly again amid the Middle East unknowns and capped at $86.50 but holding $84.00 again as the second-guessing continues. Gold retains its allure amid the wobbly risk tones, inflation fears and reports of Central Bank buying and now surged to new record highs of $2398 as I type after a break up through and hold of $2320.
GBPUSD: Capped around 1.2580 helped by some GBPJPY supply initially but holding 1.2500-10 helped by EURGBP selling and some better risk tones renewing GBPJPY dip demand.I remain a rally seller. EURGBP: Failing around 0.8560 this time amid the ECB fallout and falling to test 0.8530-35 this morning. GBPJPY: Good two-way business again amid the variable risk appetite. Capped at 192.60 this time but holding 191.30-50 in the retreat still. Sellers will remain poised but some caution still required for the moment.
EURUSD: Support around 1.0675 this morning so far after capping into 1.0760 yesterday amid the ECB. I remain a rally seller as my preferred side. USDJPY: We've now posted fresh 35-year highs of 153.37 and remain underpinned after yesterday's retreat once again held 152.80 as I highlighted in my tweet. Still expecting dip demand for the moment.
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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