Thursday 27 April 2023
Risk remains wobbly and the Greenback looks a little soft still after some soggy US data and as the CB conjecture continues with the latest policy decisions from BOJ tonight/tomorrow and FOMC next week looming ever closer. Bank of Japan changes to YCC can not be entirely ruled out as I said earlier in the week although June is being touted as better odds of that but at very least we might see some sort of reference to a policy review.
Month-end signals still suggesting a fairly balanced USD position and yesterday's Spot-date London fix came and went with little fuss but EURJPY demand still notable with some general corporate EUR demand also helping. US GDP data at 12.30 GMT might set the algos off if wide of the mark.
Equities are off their lows this morning as I type but WTI has capped at $77.00 now as the recesssion fear-led retreat continues again after the recent OPEC+ support and breaking down through $75.50 support to test $74.00.Gold continues to trade tightly within a $1970-2010 range amid the fragile risk tones but with talk of CB selling to cover debts elsewhere capping rallies. 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.
Remember, focus on the price action and let the algos do the heavy lifting/dropping amid all the second-guessing. The important thing is to identify your preferred risk/reward entry/exit levels prior and be poised to execute.
GBPUSD: Another cap above 1.2500 yesterday and some re-sells dully placed per ongoing strategy as Tweeted after a good hold of 1.2430 yesterday where we also have some decent option interest today.Some pips duly banked in current retreat into 1.2460 and I remain a rally-seller on this pair overall. EURGBP: Capping into 0.8875 yesterday but still underpinned by the month-end EUR demand and ECB 50bps hike conjecture and holding 0.8845-50.Expect more two-way business still overall. GBPJPY: Capping into 167.00 yesterday as risk tones softened but holding 166.00 as the jury remains out.
EURUSD: A good hold of 1.1030-40 yesterday once we broke through ahead of the decent options interest rolling off helped by the USD supply plus general EURJ month-end demand still but finding 1.1100 a step too far. Re-sells duly placed and pips banked with 1.1030 now providing a decent base. 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 134.00 and retreating back to test 133.00 this time as risk softened and USD supply prevailed. I continue to favour rally sells overall with hedges elsewhere. BOJ casting a shadow still of course.
More detailed analysis across a variety of pairs from mike@mspfx.co.uk
Interbank rates: 08.33 BST
GBPUSD 1.2461
EURUSD 1.1050
EURGBP 0.8864
GBPEUR 1.1280
USDJPY 133.76
GBPJPY 166.73
GBPCAD 1.6996
GBPCHF 1.1132
GBPZAR 22.7562
GBPHKD 9.7141
USDCHF 0.8914
EURCHF 0.9852
EURHKD 8.6118
AUDUSD 0.6618
NZDUSD 0.6145
USDCAD 1.3633
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