Tuesday 5 March 2024
Sorry to sound like a broken record again but markets still in second-guessing/ranging mode. Higher US bond yields have helped underpin the Greenback again but it's oh so quiet and with little energy to move too far. China's National Congress has announced a target of around 5% for GDP this year amid pigs flying past the window.
CB decisions this week from the BOC on Wednesday and ECB on Thursday. Also tomorrow brings Fed's Powell giving his Semi-Annual Mon Pol testimony to US lawmakers. UK Spring Budget on tomorrow too with the Fin Min between a rock and very hard place re tax cuts/additional borrowing as a General Election looms this year, possibly as early as May.
The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Hezbollah/Red Sea tensions are all still casting their own shadow so while all the uncertainty remains, both economical and geopolitical, remember 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. These are tight ranges and will produce regular jobbing opportunities therefore while the jury remains out.
Equities are off their recent record highs but remain underpinned overall on the firm belief that interest rates will be coming down at some stage and seemingly ignoring ecomomic slowdown and geo-political fragility. WTI capping at $80.00 then $79.00 but holding $78.00 the second-guessing on Red Sea/Gaza and global economy continues. Gold has continued its impressive surge higher after further technical resistance breaking at $2100-05 and now $2123 after holding $2080. Maybe it's in the shiny stuff where we're seeing some safe haven plays.
GBPUSD: Failure around 1.2700-10 yesterday but holding 1.2650-60 in the retreats still where we had large options rolling off yesterday. I remain poised for further sells when momentum fades as we continue to range overall. EURGBP: Basing around 0.8550 and capping at 0.8570 still as the BOE/ECB debates continues. ECB looming Thursday. GBPJPY: Testing 191.20 on some better risk tones after a hold of 190.20. Sellers always poised as the risk and JPY juries remain out but underpinned still for the moment.
EURUSD: Support around 1.0830 still but failing into 1.0860 again. I remain a rally seller. ECB looming on Thursday. USDJPY: Capping at 150.50-60 this morning after holding 150.20. I remain a rally seller as preferred side overall given that the BOJ still don't want this racing away too far but underpinned for the moment as we range tightly.
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