Wednesday 5 June 2024
After 24 hours of USD decline led by USDJPY and JPY demand as equities wobbled we've now seen a decent reversal to that move as equities rally and risk appetite improves in these ever-fickle markets.
Some mixed final PMI data out this morning from Europe and attention moves toward US ADP and Services ISM and the BOC today then ECB interest rate decision tomorrow. The monthly infatuation with the US Non Farm Payrolls report on Friday definitely a source of focus too .
Ukraine/Russia war and Middle East tensions sadly 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.
Equities rallied late in NY helping to reverse the soggy risk sentiment but falling a little in early Europe with profit-takers still lurking as the CB second-guessing continues. WTI rallied too amid the better risk tones from $72.50 to now test $73.30-50 as I type. Gold rallied to $2342 having held the recent $2315 support. Dip demand should remain but profit-takers poised.
GBPUSD: Capping at 1.2800 again in the initial rally yesterday but gains tempered by GBPJPY supply but holding 1.2740-50 in the dip. EURGBP: The yawnfest continues ahead of tomorrow's ECB decision and holding around 0.8505 but capping at 0.8520-25. Expect more two-way as the ECB/BOE rate cut conjecture and cross flows continue. GBPJPY: Holding 197.30-50 yesterday in the extended retreat after failing at 198.30-5 but now testing 199.50 amid the better risk tones.
EURUSD: Holding 1.0860 yesterday amid the USD supply but failing at 1.0885 in the rally as we continue to range overall. USDJPY: What goes down invariably goes back up in these markets and support at 154.50-60 has led to a decent rally to 156.12 this morning.
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