Tuesday 18 April 2023
Yes I know my current headlines and subtext are all on a similar theme but that's the fact of it right now with markets still second-guesing not only the FOMC in next month's policy decision but all CBs.Yesterday saw some extended USD demand but that's run out of steam for the moment and some supply returning in Asia and Europe as I type.
The RBA Minutes seemed to not entirely rule our further rate hikes and that's helped underpin the Aussie Dollar while the latest UK jobs/wages data still shows the latter rising 6.6% yr/yr but understandably lagging behind inflation in real terms still while the unemployment rate nudged a tad higher overall. The 1m+ job vacancies still presents a concern imho.
Equities are currently nudging higher again after another dip yesterday but remain underpinned overall amid softening rate hike tones while WTI has capped into that $81.50 since a break down yesterdfay through that decent support line and becomes pivotal after holding $80.50 as the jury remains out. Gold had another dip into $1980 with longs taking some profit as I've been noting but underlying dip demand still amid the globl uncertainties both financially and otherwise. 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. Oh, and North Korea casting a shadow too.
GBPUSD: Capping into 1.2450 yesterday and a steady retreat amid the USD demand but finding good support into 1.2350 and now back up through 1.2400 as some USD supply returns. A few pips banked in the retreat and I remain a rally-seller on this pair overall while we continue to range.Keeping core shorts as USDJPY hedge too. EURGBP: Support coming in now at 0.8815 after another dip yesterday as EURUSD long bailed out. Sellers poised around old support of 0.8830-35. Expect more two-way business still. GBPJPY: Capping at 166.70 this time after holding 165.75-80 again as the risk jury remains out. Markets remain fickle with sellers still poised when sentiment softens.
EURUSD: Another decent retreat, this time into 1.0900 amid the USD demand. Plenty of ECB chatter on 25bps vs 50bps rate hike continues to keep markets second guessing still but some longs above 1.1000 definitely bailing. Pips banked and I remain a rally seller as my preferred side overall but equally a case for buying dips still as we continue to range. USDJPY: Capping into 134.75 where we have decent technical resitance per my man's anaylsis yesterday for those who subscribe with a little softening of risk appetite helping too. USD supply this morning sees a retreat into 134.25 and some pips banked.
More detailed analysis across a variety of pairs from mike@mspfx.co.uk
Interbank rates: 07.43 BST
GBPUSD 1.2406
EURUSD 1.0943
EURGBP 0.8820
GBPEUR 1.1337
USDJPY 134.37
GBPJPY 166.70
GBPCAD 1.6592
GBPCHF 1.1144
GBPZAR 22.6912
GBPHKD 9.6674
USDCHF 0.8978
EURCHF 0.9825
EURHKD 8.5273
AUDUSD 0.6732
NZDUSD 0.6200
USDCAD 1.3375
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