Wednesday 13th April 2022
USD demand notable again after the US CPI data-led retreat with core inflation coming below expectations but we're now seeing bond selling again and yields back on the rise. Risk is slightly softer again with equities lower this morning. Gold and oil both off their lows and looking underpinned still.
USDJPY has broken up through the key 125.80 area to post 20-year highs of 126.30 and the general JPY supply is helping to underpin core pairs in the dips too. RBNZ hiked interest rates by 0.5% but the Kiwi has fallen as markets factor in front-loading and hence lesser hikes to come further down the road. Long Easter week-end approaching but a lot of water to pass under the bridge before that with the latest ECB policy announcement tomorrow in the mix too. Meanwhile the atrocities in Ukraine sadly continue.
For new and older readers alike I repeat my view that it's still a case of not over-analysing but keeping your focus on price action in core and cross-pairs.Continue to identify ranges and what levels present value for money. Algos will continue to knee-jerk price action on the variable headlines. Discipline is key as ever.
GBPUSD: Another hold below 1.3000 but this time at the lower 1.2970 area afer capping around 1.3050 again yesterday. Re-sells duly placed and pips banked in the retreat per ongoing strategy. I remain a rally seller overall while keeping an eye on EURGBP and GBPJPY as always. EURGBP: A rally failure around 0.8360 but holding 0.8315-20 in the retreat so far where I noted bids yesterday. I would still expect some more dip demand down here but equally sellers poised in the bounce. Some option interest in play today. GBPJPY: Support at 163.00 still as core pairs continue to find dip demand amid the USD demand and JPY supply. Sellers poised though when risk appetite/bond yields softens as we saw yesterday.
EURUSD: Sellers prevailing around 1.0900 yesterday but holding the March 7 lows around 1.0820 in the retreat per my tweet. USDJPY: Based around 124.80 after the US CPI-led retreat and a strong bounce through the key 125.80 area.Caution still advised but good two-way pips again. Trend essentially higher still as we post 20-year highs. EURJPY: Support at 136.20 again after yesterday's retreat to 135.60 but failing at 136.75 so far. USDCHF: Failure into 0.9350 again as EURCHF slides back yet again amid the general EUR softness but holding 0.9300 still overall amid the USD demand with the SNB casting ahadow still.
EURCHF: Failure around 1.0150-60 this time again and a solid retreat amid the general EUR selling to test 1.0090-00 but supported for the moment with the SNB lurking. Rally sellers still poised.
AUDUSD: 0.7420 area holding the latest falls with that option interest this week at 0.7400 still in play after sellers prevailed above 0.7480. Should see good two-way business still so take your pick. NZDUSD has seen another retreat to test 0.6780 after a cap at 0.6900 post-RBNZ as markets reacted to the softer hawkish tones. USDCAD: 1.2580 now providing a base again amid the firmer USD tones and now testing 1.2650 again this morning. Two-way business still expected amid all the uncertainty.
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.37 BST
GBPUSD 1.2990
EURUSD 1.0835
EURGBP 0.8338
GBPEUR 1.1990
GBPCAD 1.6432
GBPCHF 1.2114
GBPZAR 18.7975
GBPHKD 10.1270
USDJPY 126.15
EURJPY 136.61
EURCHF 1.0104
AUDUSD 0.7439
USDCAD 1.2639
USDCHF 0.9322
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