Tuesday 30 July 2024
In this busy week where we see the BOJ, US Fed (tomorrow) and BOE (Thursday) all announcing their latest decisions we've seen mixed USD and risk tones with JPY supply returning after yesterday's initial USDJPY dip but has now tested 155.20 resistance helping to underpin core pairs through the cross flows.Yet another reversal has seen a drop back into 154.75 capping cross pairs too as I type. A reminder of how fickle these Summer markets are particularly with BOJ and FED adding to the uncertainty.
I've been reporting that month-end rebalancing models are indicating small USD-buying signals with a moderate signal on USDJPY due to the recent large JPY appreciation and we certainly saw some of that into yesterday's 4pm London fix so I hope my warning helped. Today's data slate brings German inflation with US consumer confidence and latest job openings to follow.
US and European equity markets have recovered off yesterday's retreat lows with dip buyers prevailing again but with rally sellers/proft takers still poised. WTI capped at $77.30-50 again and retreated amid the USD demand but support coming in at $75.00 a few times so far. Gold has found some dip demand into $2370 again but with rallies capped by more profit-taking between $2390-00. Dip demand should remain but profit-takers/sellers still poised.
GBPUSD: Holding 1.2800-10 in yesterday's USD demand and cross-led supply but capping above 1.2865 so far as GBPJPY retreats. EURGBP: Holding 0.8410 in yesterday's extended retreat amid some EUR supply and GBPJPY demand returning. Very large option contracts at 0.8450 in play still if we rally further. GBPJPY: Another rollercoaster ride amid the USDJPY moves and variable risk tones. Support below 197.00 then 198.00 before the strong rally into 199.50 but currently in retreat as USDJPY fails above 155.00. BOJ in focus.
EURUSD: A hold of decent technical support around 1.0800 yesterday in the USD-led month-end fix move but now back to 1.0830 we continue to range tightly amid the variable cross and USD flows. USDJPY: Ever fickle atm as we wait on BOJ and yesterday's sharp drop into 153.00 has now been usurped by a strong rally to test 155.20 before capping. MOF/BOJ fears will remain and BOJ rate hike/policy conjecture all in the mix still.
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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