Friday 21 June 2024
USD demand still prevailing for the moment but steadier risk sentiment still producing JPY selling too on the cross dips and therefore tempering losses on core pairs. A small reversal as I type this morning as EZ flash PMIs come in below expectations.
Yesterday the BOE left rates on hold as widely expected but with vote count unchanged and mixed messages from the statement that could be read slightly hawkish/cautious albeit also signalling the next move will be down. It's just a question of when as far as markets and BOE are both concerned......This morning's better UK Retail Sales data had little impact given the bigger picture/uncertainty.
While the CB second-guessing continues remember as always to identify your preferred risk reward levels and let the algos do their thing along with the natural and speculative flows especially in days like today with thin liquidity. Don't get greedy or over-analyse.
Equities still seeing two-way trading amid the CB/political conjecture but underpinned albeit with sellers still lurking and turning lower as I type. WTI still seeing good support and been up further to test $81.50 on the generally steady risk sentiment after a hold of $80.50-60. Gold now finding a base at $2335 but failing at $2365 this time. Dip demand should remain but profit-takers still poised.
GBPUSD: Support coming in at 1.2640 this morning after failing at 1.2700-10 around BOE but with limited initial drop on the mixed messges and large option interest I highlighted.EURGBP and GBPJPY flows still in play too. EURGBP: Holding 0.8435 yesterday but heading down there again this morning after the soggy EZ PMIs after capping into 0.8465. EU politics still casting a shadow as we head into the weekend.
GBPJPY: Holding 200.50 this morning in the retreat from 201.50 as risk sentiment turns a little softer and core pairs find some natural rally supply too.
EURUSD: Capping at 1.0720-30 and now falling into 1.0670 amid the soggy EZ data. Cross flows in play still too and large options at 1.0650-60 and 1.0690-00. USDJPY: A decent rally again amid the USD demand/JPY supply double whammy but capping above 159.00 as MOF/BOJ intervention fears remain.
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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