Monday 13 May 2024
FX markets still ranging with the focus now shifting to the release of US CPI data on Wednesday to keep the FOMC second-guessing in full flow.Friday's US Michigan Sentiment data came in well below expectations and although US bond yields rose we saw little by way of FX action. Plenty of option contract interest around at the moment helping to contain too.
In Asia we've seen USDJPY drop back from 156.00 in rapid fashion amid growing talk of Japanese mon pol normalisation but a hold of 155.50 has brought with it renewed JPY supply. Data slate today has nothing of note but we do have Fed speakers in the form of Jefferson and Mester. The Ukraine/Russia war and Middle East tensions sadly still cast their own very large shadow. 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. These are tight ranges and will produce regular jobbing opportunities therefore while the jury remains out.
Equities fell and rallied in NY on Friday and steady as European trading gets underway bringing with it some better risk appetite while WTI held $77.50 after failing at $79.50-60 again amid the ongoing variables. Gold has capped at the $2365-75 resistance area and currently $2345 in the retreat. Expect profit-taking to continue in the rallies but appetite for the shiny stuff remains.
GBPUSD: Holding around 1.2500 in Friday's retreat after failing at 1.2535 with large option interest helping to contain. More today too plus the variable GBPJPY flows again too. I remain a seller while we continue to range overall. EURGBP: Capping onto 0.8610 but still holding 0.8595 in the retreat as the ECB/BOE rate cut conjecture and cross flows continue. GBPJPY: Holding 194.75 in the Asian rapid retreat amid rate hike talk but capping around 195.30 still amid USDJPY price action and intervention second-guessing. Sellers will remain poised in these fickle markets but still expecting dip demand too.
EURUSD: Support around 1.0760 again on Friday but failing at 1.0785-90 still as some USD demand returns. USDJPY: Support coming in at 155.50 per my notes above after capping into 156.00 but pushing back up there as I type. Intervention risk/ rate hike talk will still cast its shadow.
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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