Tuesday 30 April 2024
It's Yen intervention which still has traders a little cautious after another rapid retreat for USDJPY down into 155.00 yesterday in NY before bouncing back as rapidly to 156.15 served as another timely reminder. The Greenback has was generally a little softer with US bond yields lower yesterday but we've seen some correction since as the jury remains out as markets wait on the latest US Fed FOMC policy decision/rhetoric tomorrow.
A reminder that month-end rebalancing model shows strong USD buying against most of the majors but not really playing out atm so maybe already done last week. Still keep an eye on the London 4pm London fix for any last minute flows. Corporate Euro selling also potentially in play still.
EU GDP data coming in above expectations this morning but focus will be on EU flash CPI readings at 09.00 GMT. No Fed speakers still as we wait on Wednesday's FOMC decision. The Ukraine/Russia war and Middle East tensions still cast their own very large shadow too. Remember as always 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 are trading tightly as the jury remains out here too amid all the CB conjecture. WTI capped above $83.50 yesterday and dipped since to test $82.00 in the retreat before another small bounce so far amid the ongoing variables. Gold capping into $2350 again and now testing $2315 in the retreat with profit-taking still on the agenda amid steadier risk tones.
GBPUSD: Failing at 1.2568 in the softer-USD bounce helped finally helped it through the 1.2550-60 resistance/offers but short lived and we've been down to 1.2520 as the USD demand returns. I remain a seller while we continue to range overall. EURGBP: Capping into 0.8560 amid some general EUR montg-end supply flow and GBPJPY demand but holding 0.8530 so far as the ECB/BOE rate cut conjecture continues. GBPJPY: Holding 195.00 in the latest intervention-led retreat but capping at 197.00. Sellers will remain poised in these fickle markets but still expecting dip demand too as I've been warning.
EURUSD: Support around 1.0690 this morning helped by the positive EU data but still suspect to general EUR month-end supply with ECB conjecture a driver too and capping around 1.0730 still. I remain a rally seller as my preferred side still but patience a virtue as we range tightly. USDJPY: Further intervention yesterday (although still not officially confirmed by MOF/BOJ) per my notes above.
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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