Thursday 2 May 2024
USD selling came as the the more considered reaction to last night's FOMC decision/Powell presser after the expected algo-led knee jerk higher initially. It was a cautious statement with rates on hold as expected but Powell appeared to pour cold water on the idea that rates could rise again. Cue a decent USD sell-off but moves tempered by some apparent USDJPY intervention just as NY closed and the caution since has helped cap JPY crosses and core pairs.
Data slate today includes Challenger job cuts and weekly jobless claims followed by Factory Orders but it's tomorrow key Non Farm Payrolls which will keep markets guessing for the moment. The Ukraine/Russia war and Middle East tensions still cast their own very large shadow too. Remember don't get greedy or over-analyse.
Equities rallied then fell in NY podt-FOMC but once again steadier in Asia/early Europe amid all the various CB second-guessing. WTI capped above $81.20 yesterday and dipped again since to test $78.50-60 in the extended retreat but holding $79.00 so far this morning amid the ongoing variables. Gold rallied into $2330 post-FOMC decision but fell through the presser with profit-taking once more on the agenda and now testing $2300 as I type.
GBPUSD: Failing at 1.2550 again and some re-sells duly placed but holding 1.2490-00 in the retreats. Cross flows very much in play again. EURGBP: Capping into 0.8560 but holding 0.8545 so far as the ECB/BOE rate cut conjecture continues. GBPJPY: Holding 191.80-00 in yesterday's intervention-led retreat after capping at 197.00 but now some support into 194.00. Sellers will remain poised in these fickle markets but still expecting dip demand too as I've been warning.
EURUSD: Support around 1.0670 yesterday and 1.0700 this morning after the USD supply returned but capping around 1.0730 still helped by EURJPY and EURCHF selling too. USDJPY: Capping at 157.75 pre-FOMC and various stages of selling through the presser and after including that rapid drop into 153.00.
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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