Friday 8 March 2024
USD supply still notable in the past 24 hours with markets expecting June rate cut from the US Fed while yesterday's ECB decision to keep rates on hold was as expected. Lower EZ inflation forecasts initially sent the Euro lower but we've seen some dip demand since albeit cut comments this morning undermining too. Increasing speculation again that the BOJ will tighten monetary policy soon in the wake of strong wage growth data saw USDJPY in retreat again and JPY demand prevailing overall.
Today we see the always keenly awaited/over-hyped US NFP data which invariably gets the algos running around in a frenzy at 13.30 GMT so be prepared. The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Hezbollah/Red Sea tensions are all still casting their own shadow.
Equities have been in retreat again but are their lows and remain underpinned overall on the firm belief that interest rates will be coming down at some stage soon. WTI capping at $79.60 this time after holding $77.50-60 in yesterday's retreat as the second-guessing on Red Sea/Gaza and global economy. Gold has continued its impressive move higher to post fresh record highs of $2171 this morning after holding $2150 and underpinned overall on the belief that FOMC will start cutting rates in June.
GBPUSD: Failure around 1.2830 this time after holding 1.2780 amid the USD supply and EURGBP retreat but GBPJPY selling still helping to cap. I remain poised for further re-sells when momentum fades as we continue to range overall. EURGBP: Testing 0.8520 this morning after capping at 0.8550-60 post-ECB. GBPJPY: Testing 188.50 support line again this morning in the retreat from 189.75 amid the JPY demand. Expecting some support as we're ranging overall still.
EURUSD: Support around 1.0910 amid the USD supply but sellers capping above 1.0950 post-ECB. I remain a rally seller as my preferred side. USDJPY: Capping at 148.30 yesterday and an extended retreat into 146.80 this morning amid the USD supply/JPY demand double-whammy.
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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