Thursday 2 June 2022
Further rises in US bond yields coupled with some firmer data saw further gains for the Greenback but some sell interest returning this morning. USDJPY made its inevitable challenge on 130.00 but capped at 130.25 while GBPUSD had a look at 1.2460 in a rush and EURUSD has been down to 1.0640. Equities remain underpinned as does gold but oil is retreating again after its over extended rally earlier in the week. Risk sentiment remains bouyant overall.
Highest Swiss inflation data in 14 years just out has prompted strong CHF demand with markets assuming the SNB will have to act per their recent rhetoric. No guarantees on that though. Long week-end in the UK starting today (Thurs) to celebrate the Queen's Platinum Jubilee so markets will be closed.
I repeat my view that it's a case of not over-analysing but keeping your focus on price action in core and cross-pairs. We will continue to trade in ever-fickle markets so the need remains to identify ranges and what levels present value for money. Algos will continue to knee-jerk price action on the variable headlines versus natural flows. Discipline is key as ever.
GBPUSD: Some pips banked in yesterday'sc rapid retreat to 1.246o. Some re-sells now around 1.2525 . I remain poised to sell rallies but timing as ever is crucial.EURGBP: Holding 0.8500 this time and testing 0.8540 only to cap again. More two-way business expected. GBPJPY: Underpinned at 162.00 now but failing above 163.00 still with sellers poised as the risk uncertainty continues.
EURUSD: Finding a decent base at 1.0640 after yesterday's rapid retreat on the USD demand and now posting 1.0684 with some more option interest in play again today.USDJPY: Solid rally to 130.25 amid the yield-led JPY supply but dipping to 129.90 this morning on some general USD supply after yesterday's extended move. EURJPY: Now supported at 138.35 but sellers prevailing into 139.00 still. USDCHF: Capping at 0.9660 in yesterday's rally and now looking at 0.9580 in a hurry after the Swiss inflation data.SNB shadow lurking in the dips still. I expect more of the same with rally sellers still poised.EURCHF: Now capping at the previous 1.0280 support line but holding 1.0220 in the latest retreat post-CPI data. Expect some SNB smoothing but rally sellers continue to lurk in expectation of potential rate tightening.
AUDUSD: Still finding a base around 0.7150 but equally capping above 0.7200 again and some pips banked in the latest retreat. GBPAUD capping at 1.7550 and testing 1.7360 in yesterday's AUD rally. NZDUSD now supported at 0.6460 line in its latest retreat and now testing 0.6500 again where we have some option interest today. GBPNZD finding support at 1.9200-50 this time after capping into 1.9360 as NZDUSD finds dip demand again. USDCAD: Supported at 1.2625-30 amid firmer USD/softer oil but equally capping into 1.2680. I still prefer rally sells for the moment.
Let's continue to be careful out there.
Interbank rates: 07.53 BST
GBPUSD 1.2510
EURUSD 1.0678
EURGBP 0.8530
GBPEUR 1.1723
GBPJPY 162.54
GBPCAD 1.5847
GBPCHF 1.2020
GBPZAR 19.4546
GBPHKD 9.7531
USDJPY 129.84
EURJPY 138.65
EURCHF 1.0231
EURHKD 8.3200
AUDUSD 0.7182
USDCAD 1.2657
USDCHF 0.9580
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