Wednesday 1 November 2023
The Middle East back-story continues with the IDF making more physical inroads into Gaza and no ceasefire in sight but markets are also focussed on the US Fed FOMC decision later in the wake of the BOJ fallout plus the US treasury refunding announcement and ADP data. Some USD demand prevailing again overall but some verbal intervention from the MOF has seen JPY pairs in lively mood and that's spilt over into core pairs too.
BOE follow up tomorrow and then we have the key US FP jobs/wages data on Friday to round off what has always been destined to be a busy start to the month.
Equities have been generally been steadier amid the variable fragile risk sentiment overall still but in retreat again this morning. WTI capping at $83.00 this time amid the uncertain global economic picture too and testing $80.50 before finding some support. Gold capping at $2000-10 again with natural sellers ever poised still but has found support around the $1975 pivot. Geopolitical concerns still very much a threat to market stability with focus on increasing Ukraine/Russia tension and now with the Middle East sadly to the fore.
GBPUSD: Support still forming between 1.2120-30 amid some USD supply and GBPJPY demand after a failure at the strong 1.2180-00 area that I warned about as we continue to range tightly amongst all the unknowns including the BOE this week. I remain poised for further entries when momentum fades. EURGBP: Back down through 0.8720-30 after capping at 0.8750 with the help of some GBPJPY demand returning and EUR in retreat mode generally. Ranging still overall amid core pair fluctuations. Options in play if we retreat further. GBPJPY: Holding 183.20 then 183.50 after capping at 184.40 amid the general GBPJPY demand but knocked lower on the MOF verbals. Rally sellers ever poised still amid the fragile risk but some caution required atm.
EURUSD: Support at 1.0540-50 so far in the extended retreat amid some US demand but also dovish ECB tones and soft EZ data after capping at 1.0680 as we continue to range. I remain a rally seller overall. Options in play. USDJPY: Finally broke up through the 150.30-50 offers/res amid USD demand and BOJ disappointment and I duly took my stop loss at 150.60. MOF/BOJ intervention fears still there but should remain underpinned for the moment otherwise as I warned yesterday so I've been happy to watch and focus on other pairs.
For more detailed analysis across a variety of pairs email mike@mspfx.co.uk
Interbank rates: 08.35 BST
GBPUSD 1.2150
EURUSD 1.0558
EURGBP 0.8689
GBPEUR 1.1507
USDJPY 151.28
GBPJPY 183.84
GBPCAD 1.6875
GBPCHF 1.1039
GBPZAR 22.7202
GBPHKD 9.4570
USDCHF 0.9096
EURCHF 0.9604
EURHKD 8.2235
AUDUSD 0.6341
NZDUSD 0.5818
USDCAD 1.3884
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