Wednesday 17 May 2023
The US debt ceiling talks between Biden and Congress have broken down but that's not stopped the US Dollar making some solid gains as US data suggests that the Fed will remain hawkish and those bizarrely bonkers bets on rate cuts by year-end that I highlighted at the time have had a little reality check.
Not a lot data-wise to feed off today but we do have a few ECB speakers and BOE's Bailey addressing the UK Chamber of Commerce ar 09.50 GMT.
Equities are steady as I type but with sellers poised in the rallies amid the fragile economic backstory and Fed tightening talk after another retreat yesterday. WTI also on the back foot still after after capping into $71.50 then $71.00 amid the ongoing global recession/slowdown fears.Those natural sellers of Gold still prevailing and now broken down through $2000-05 in the latest retreat to test $1980 support amid the Fed tightening talk.Ukraine/Russia war continues to be the main geo-political elephant in the room with ongoing US/China/Taiwan tensions in the mix too The world remains a fragile place for sure.
GBPUSD: Caps into 1.2500 before an extended retreat into 1.2420 this morning amid the USD demand. I remain a rally seller as my preferred side. Bailey talking at 09.50 GMT. EURGBP: Capping into 0.8720 again after the rally from 0.8700 helped by GBPUSD breaking down faster than EURUSD this time as we continue to range.Expect some two-way business still overall. GBPJPY: Basing around 170.00-20 this time with USDJPY bouncing strongly with talk of JPY selling aligned with Yuan weakness Rally sellers ever-poised and so far capping moves at 170.60.
EURUSD: Support around 1.0835 in this morning's retreat amid the USD demand after failure into 1.0880 which becomes pivotal and I remain a rally seller as my preferred side overall. USDJPY: Support prevailing at 135.60-80 yesterday as I had warned and breaking up through the decent 136.25-35 resistance which now becomes support. I still prefer to sell rallies/be long JPY overall but caution/patience still required in these ever-fickle markets as I've been warning.Strong resistance into 137.00 being broken as I type. Yuan weakness-influenced JPY supply notable despite risk tones being wobbly.
More detailed analysis across a variety of pairs from mike@mspfx.co.uk. Mentoring details there too.
Interbank rates: 08.32 BST
GBPUSD 1.2430
EURUSD 1.0835
EURGBP 0.8714
GBPEUR 1.1475
USDJPY 136.96
GBPJPY 170.25
GBPCAD 1.6780
GBPCHF 1.1181
GBPZAR 23.8458
GBPHKD 9.6830
USDCHF 0.8984
EURCHF 0.9734
EURHKD 8.4420
AUDUSD 0.6640
NZDUSD 0.6238
USDCAD 1.3507
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