Wednesday 26 April 2023
US treasury bond yields falling and the Greenback is finding sellers again this morning as risk remains wobbly and the Central Bank conjecture continues with the latest policy decisions from BOJ on Friday and FOMC next week looming ever closer. Overnight the Aussie CPI data came in soft and further undermining AUD pairs on confirmation that the RBA will have their dovish hats on.
Month-end signals still suggesting a fairly balanced USD position but EURJPY demand is cited as one highlight and that's something to keep in mind again as we see EURUSD rally back through 1.1000 also supported by the USD supply and large option contract interest today to keep range contained.
Equities are in retreat once again this morning after yet another couple of rally attempts yesterday while WTI has capped at $79.00 again and breaking down to test $76.50 as we continue to range. Gold continues to trade tightly within a $1970-2010 range amid the fragile risk tones but talk of CB selling to cover debts elsewhere. Ukraine/Russia war continues to be the main geo-political elephant in the room with ongoing US/China/Taiwan tensions in the mix too and now ongoing Middle East tensions and turmoil in Sudan escalating.
GBPUSD: A good hold of 1.2380 yesterday and now rallying to 1.2460 on the USD supply but tempered by the risk-off GBPJPY supply as well as the ongoing EURGBP demand. Rinse n repeat while we range and I remain a rally-seller on this pair overall. EURGBP: Capping into 0.8880 yesterday but holding 0.8835 and underpinned by the general ECB hike-led demand. Expect more two-way business still overall.
EURUSD: A good hold of 1.0960 yesterday helped by the USD supply and large option interest again today plus EURJPY demand still and now testing 1.1030-40 where we also have decent options rolling off. Pips banked in yesterday's retreat and I remain a rally seller as my preferred side overall but equally a case for buying dips still as we continue to range. ECB conjecture continues. USDJPY: Capping yesterday at 134.25 and retreating back to test 133.40 as risk softened. I continue to favour rally sells overall with hedges elsewhere. BOJ casting a shadow still.
More detailed analysis across a variety of pairs from mike@mspfx.co.uk
Interbank rates: 08.30 BST
GBPUSD 1.2450
EURUSD 1.1014
EURGBP 0.8850
GBPEUR 1.1300
USDJPY 133.62
GBPJPY 166.23
GBPCAD 1.6982
GBPCHF 1.1097
GBPZAR 22.7948
GBPHKD 9.7063
USDCHF 0.8911
EURCHF 0.9815
EURHKD 8.5897
AUDUSD 0.6603
NZDUSD 0.6133
USDCAD 1.3631
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