Wednesday 7 February 2024
We've seen some USD supply returning as I warned yesterday as US bond yields failed to make further ground and retreated. More auctions in the 10 and 30 year today but the USD jury remain out again as what looked like new ranges developing has not materialised at this time. USDJPY notably failing ahead of the 149.00 resistance line again that I've been highlighting and dropping back to 147.71. NZDUSD took full advantage of the USD supply with a decent rally helped by strong jobs data.
The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Red Sea tensions still casting their own shadow. Fed-Heads talking today include Kugler, Barkin and Bowman. While all the uncertainty remains, both economical and geopolitical, remember to identify your preferred risk reward levels and let the algos do their thing along with the natural and speculative flows. Don't get greedy or over-analyse.
Equities remain underpinned but retreated in Asia amid the softer USD tones/uncertainty and turning a little lower again as European trading gets underway. WTI has capped at $73.75 in Asia with sellers poised still after holding $72.80-00 with Red Sea concerns, and technicals offering some support again but testing $73.25 as I type. Gold has rallied again on the lower bond yields/softer risk tones after holding the old $2025 support area but now capping at $2040 as we continue to range tightly.
GBPUSD: Capping at 1.2625 in the rally so far after holding 1.2520-25 then 1.2560-80 as USD supply returned. I remain poised for further sells when momentum fades as we continue to range. EURGBP: Capping at 0.8550 now but holding 0.8530 so far as the BOE/ECB debates continue. GBPJPY: Looking to test 186.70 again as I type as core pairs find dip demand after holding 186.20-30.Sellers will remain poised but good two-way still for the moment.
EURUSD: Support at 1.0750 again this time amid the USD supply but capping at 1.0775 this morning with general EUR supply notable still. I remain a rally seller. USDJPY: Capping around 148.80 yet again with 149.00 still providing key resistance and some further re-sells placed but holding 147.71 so far. I remain a rally seller as preferred side overall but dip demand still notable for the moment.
For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email mike@mspfx.co.uk
Interbank rates: 07.25 GMT
GBPUSD 1.2620
EURUSD 1.0769
EURGBP 0.8533
GBPEUR 1.1717
USDJPY 147.84
GBPJPY 186.57
GBPCAD 1.6991
GBPCHF 1.0990
GBPZAR 23.7867
GBPHKD 9.8231
USDCHF 0.8692
EURCHF 0.9361
EURHKD 8.3815
AUDUSD 0.6535
NZDUSD 0.6111
USDCAD 1.3477
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