Monday 8 July 2024
Friday's key US NFP jobs/wages data came in with mixed results and the intial USD demand was quickly reversed with US bond yields falling. Once again USDJPY led the way and that's continuing this morning as it rallies once again on the renewed JPY supply despite USD falling elsewhere again.
In France the co-ordinated action from the Centre and Left Parties to halt the advance of the Right duly achieved their goal but with the landscape now leaning towards Far Left and a hung parliament in a new period of uncertainty. Initial reaction was a gap lower in Asia for the Euro but we've seen some recovery since as the jury remains out there too.
Nothing on the data or CB speaker slate today but we do have the new UK Fin Min Rachel Reeves (formerly an economist at the BOE) outline her intial plans for growing the UK economy at around 09.30 GMT.
Equity markets remain underpinned albeit with sellers still lurking but we've seen sold rallies in the US and a bounce in the CAC 40 helping to underpin Euro and risk sentiment with accompanying JPY supply. WTI capping around $84.00 on Friday and now testing $82.00 in the extended retreat. Ever fickle for the moment and expected to range still. Gold rallied to look at $2395 this timebut in retreat as I type to $2375. Dip demand should remain but profit-takers/sellers still poised.
GBPUSD: Support coming in at 1.2760 in the initial USD grap after NFPs but 1.2780-90 forming a decent line since in the renewed USD supply and better risk GBPJPY demand plus some EURGBP supply too albeit that pair recovering this morning. More two-way expected as we continue to range. EURGBP: Holding 0.8435-40 in the Asian gap lower but capping into 0.8460 as I type. EU and UK politics still casting a shadow along with ECB/BOE rate cut conjecture. GBPJPY: Following USDJPY up and down then up again once again amid the variable risk tones. Holding 205.30-50 this time and testing 206.50 as I type.
EURUSD: Testing 1.0800 in the Asian gap but now back up to Friday's close around 1.0840 amid the general USD supply and CAC 40 recovery as we continue to range tightly. USDJPY: Support coming in at the old 160.25-30 line this time after breaking back down through 160.50 but rallying strongly this morning on the better-risk JPY supply. MOF/BOJ intervention fears remain but not putting off dip buyers 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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