Monday 22 April 2024
Friday saw another retreat for the Pound on comments from BOE's Ramsden which included noting that the balance of domestic risks to the outlook for UK inflation is now tilted to the downside and expecting a rapid move lower in inflation next year. Cue some rapid moves lower in GBP pairs too since his remarks.
Fed speak on Friday came from Goolsbee and his cautious/hawkish tones is keeping USD demand overall while we got more dovish ECB talk looking for multiple rate cuts from June but little impact on EUR pairs as that's now factored in. US Federal Reserve decision on 1 May means no further Fed speakers until then but ECB'S Lagarde is back up to the rostrum later today.SNB outgoing Chairman Jordan this morning has said monetary policy should remain focused on inflation and they've raised the minimum reserve requirement for banks from 2.5% to 4% effective July.
It was a quieter week-end on the geopolitical front but the Ukraine/Russia war and Middle East tensions 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.
Equities fell again for the sixth consecutive day but staging a small rally in early Europe as the jury remains out. I still say markets are over valued/too high. WTI capped this time at $84.00 then $83.00 on Friday amid receding ME tensions and steadier risk sentiment and now retreating again to post $80.95 as I type. Gold capped above $2400 as some profit-taking continues.Finding dip demand at $2350 so far this morning though.
GBPUSD: Holding 1.2350 this morning after capping at 1.2450-60 On Friday amid the general USD demand and then a rapid retreat to 1.2380 on the Ramsden comments. I remain a rally seller as we continue to range overall. EURGBP: Holding 0.8550 again on Friday and a rapid Ramsden-led test of 0.8600 then further move to 0.8625 since before capping as the ECB/BOE rate cut conjecture continues. GBPJPY: Capped at 192.50 again but holding 191.00 in the retreat amid underpinned USDJPY and risk appeitite turning back up but sellers will remain poised in these fickle markets.
EURUSD: Support around 1.0630 but capping into 1.0680 as the ECB conjecture plays out along with overall USD demand and fragile risk tones. I remain a rally seller as my preferred side. USDJPY: Capping at 154.75 ahead of key 155.00 area but underpinned at 154.30-40 helped by some JPY supply returning and general USD dip demand.
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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