Friday 17 March 2023
Yesterday's hawkish ECB 50bps rate hike decision was balanced by a dovish statement amid current banking sector concerns and falling
inflation forecasts but they left their options open to act in either direction in the future depending on prevailing circumstances. Further
rate hikes still on the table but the dlemma for CBs still remains the inflation/rate hike/fragile banking sector trade off despite some
temporary fixes coming in at the moment on SVB, CS, First Republic and others.
Equities have enjoyed a decent rally on the various bailouts but in retreat again this morning as the rollercoaster fragile risk ride
continues amid the uncertainty while WTI is off its $68.20 lows of yesterday but equally failing to get back through $69.50 the fragile risk tones remain. Gold has rallied again but found $1935 a step too far atm. Ukraine/Russia war continues to be the main geo-political elephant in the room with ongoing US/China tensions in the mix too.
Remember, focus on the price action and let the algos do the heavy lifting/dropping. The important thing is to identify your preferred risk/reward entry/exit levels prior and be poised to execute.
GBPUSD: Holding 1.2020 again yesterday after capping around 1.2100 but then enjoying a better-risk rally to look at 1.2180. Re-sells duly placed as offers/resistance building into 1.2200 still and I remain a rally seller still albeit continuing with some caution. EURGBP: A solid fall to 0.8750 yesterday from 0.8820 but finding some support as some EUR demand returns post- ECB. Expect some more two-way trading as core pairs and risk both fluctuate.GBPJPY: A new support line at 158.50 finally found yesterday after the retreat from 161.00 but subsequent rallies capping around 162.00 with rally sellers poised as the uncertainty/fickle sentiment continues.
EURUSD: Holding 1.0550 after the drop from 1.0640 and a decent rally post-ECB and amid better risk tones but capping at 1.0670 with very large option interest today between 1.0660-10. USDJPY: Finally coming to a halt yesterday at 131.70 in the extended retreat helped by the risk off JPY demand and some pips gratefully banked along the way. A firmer-risk rally since but capping into 133.75 and some re-sells duly placed per ongoing strategy.
More detailed analyis across many more pairs from mike@mspfx.co.uk
SubjectThe MSP UpdateFrommike@mspfx.co.uk
ToMikeDateToday 10:07
Friday 17 March 2023
Firmer risk tones return but concerns remain
Yesterday's hawkish ECB 50bps rate hike decision was balanced by a dovish statement amid current banking sector concerns and falling
inflation forecasts but they left their options open to act in either direction in the future depending on prevailing circumstances. Further
rate hikes still on the table but the dlemma for CBs still remains the inflation/rate hike/fragile banking sector trade off despite some
temporary fixes coming in at the moment on SVB, CS, First Republic and others.
Equities have enjoyed a decent rally on the various bailouts but in retreat again this morning as the rollercoaster fragile risk ride
continues amid the uncertainty while WTI is off its $68.20 lows of yesterday but equally failing to get back through $69.50.as the fragile
risk tones remain.Gold has rallied again but found $1935 a step too far atm. Ukraine/Russia war continues to be the main geo-political elephant in the room with ongoing US/China tensions in the mix too.
Remember, focus on the price action and let the algos do the heavy lifting/dropping. The important thing is to identify your preferred
risk/reward entry/exit levels prior and be poised to execute.
GBPUSD: Holding 1.2020 again yesterday after capping around 1.2100 but then enjoying a better-risk rally to look at 1.2180. Re-sells duly placed as offers/resistance building into 1.2200 still and some pips banked in the retreat to 1.,2135 so far. I remain a rally seller still albeit continuing with some caution. EURGBP: A solid fall to 0.8750 yesterday from 0.8820 but finding some support as some EUR demand returns post- ECB. Expect some more two-way trading as core pairs and risk both fluctuate.GBPJPY: A new support line at 158.50 finally found yesterday after the retreat from 161.00 but subsequent rallies capping around 162.00 with rally sellers poised as the uncertainty/fickle sentiment continues.
EURUSD: Holding 1.0550 after the drop from 1.0640 and a decent rally post-ECB and amid better risk tones but capping at 1.0670 with very large option interest today between 1.0660-10. I remain a rally seller as my preferred side still but some caution required. USDJPY: Finally coming to a halt yesterday at 131.70 in the extended retreat helped by the risk off JPY demand and some pips gratefully banked along the way. A firmer-risk rally since but capping into 133.75 and some re-sells duly placed per ongoing strategy. I continue to favour rally sells and being long JPY on the crosses too overall so I hope the steer continues to help. EURJPY: Double whammy of weak EUR and strong JPY saw another extended fall to 139.00 amid the fragile risk tones and EU bank issues but a decent rally since on the firmer risk before capping into 142.25. Expect more two-way business.
USDCHF: Capping into 0.9320 as the SNB bailout relief remains in focus and failing back through 0.9250 this morning as I type. I maintain my
prefence to sell rallies with SNB's Jordan still hinting at further monetary tightening but ongong CS concerns can not be ignored. EURCHF: Holding 0.9800 yesterday but capping at 0.9880 a couple of times since as the CS/SNB jury remains out.
AUDUSD: AUD finding support around 0.6630-50 and a decent bounce to 0.6725 led by the better risk AUDJPY demand .Keeping an eye on AUD crosses as always. Some pips banked yesterday, re-sells placed, and I remain a rally seller as preferred side. GBPAUD: Capping at 1.8240 and testing 1.8080 in the latest retreats as AUDUSD rally outstrips GBPUSD. Sellers will remain poised for the moment. NZDUSD: Holding 0.6160 in yesterday's retreat and a decent bounce to 0.6260 led by some better risk NZDJPY demand. Sellers poised as the jury remains out. GBPNZD: Similar backstory to GBPAUD again and a solid retreat into 1.9400 after failing around 1.9650 this time as NZDUSD rally outstrips GBPUSD.
USDCAD: Capping at 1.3785 as oil finds some support and CADJPY demand prevails but finding support at 1.3680 in current retreats. Expect more
two-way business amid the USD and oil/risk variables.
Let's continue to be careful out there. Interbank rates: 08.40 GMT GBPUSD 1.2142 EURUSD 1.0656 EURGBP 0.8776 GBPEUR 1.1393 USDJPY 133.19 GBPJPY 161.70 GBPCAD 1.6620 GBPCHF 1.1233 GBPZAR 22.2432 GBPHKD 9.4493 EURCHF 0.9860 EURHKD 8.2888 AUDUSD 0.6705 NZDUSD 0.6243 USDCAD 1.3700 USDCHF 0.9250
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