Tuesday 7 May 2024
After Friday's fun and games around the NFP and ISM PMI data we've seen some general USD demand prevail with the jobs/wages figures not as soft as the initial algo-led jerk and Greenback supply suggested and ISM prices were much stronger. So the jury remains out and weekend comments from Yellen on USDJPY intervention seemed to pour cold water on any co-ordinated effort. Cue a further rally but some good two-way business since.
The RBA this morning left rates on hold as expected but with less hawkish tones than some expected and we've seen AUD supply on the release and since. BOE also out with their latest decision on Thursday with expectations very much mixed on when the first rate cut might be. Plenty of Fed speakers on the slate this week too so FOMC/CB conjecture very much continuing.
Equities have fallen and rallied once again in the past 24 hours but once again steadier in Asia/early Europe amid all the various CB/data second-guessing. WTI capped above $78.80 yesterday and dipped again since to test $77.70 in the extended retreat before bouncing but capping at $78.60 this morning amid the ongoing variables. Gold has capped above $2330 with profit-taking again evident but underpinned at $2300-10 for the moment.
GBPUSD: Failing around 1.2635 on Friday after post NFP algo-led jerk higher but holding 1.2530 in retreats since but rallies failing at 1.26, 1.2580 then 1.2560. I remain a seller while we continue to range overall. Cross flows very much in play still. EURGBP: Capping above 0.8585 this time but holding 0.8555 as the ECB/BOE rate cut conjecture and cross flows continue. GBPJPY: Holding 192.50 then 193.00 in latest retreats but capping at 194.00 in the variable USDJPY price action and intervention second-guessing. Sellers will remain poised in these fickle markets but still expecting dip demand too as I've been warning.
EURUSD: Support around 1.0750-60 since Friday's heady highs of 1.0810. I remain a rally seller as my preferred side still but patience a virtue as we range tightly still. USDJPY: Capping at 154.65 after support coming in at 152.50 then 153.50 on the USD demand and lack of MOF/BOJ action plus Yellen's comments. Intervention risk will still cast its shadow but not until if/when we push back up into the 157-160 area.
Traders - For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email mike@mspfx.co.uk
Comments