Wednesday 13 March 2024
Yesterday's keenly awaited US CPI data came in marginally higher than expected and we saw an immediate knee-jerk Greenback rally from the algos before settling back lower only to bounce again later in a welcome move for volatility. Jury remain out but markets still pricing in a June rate cut from the FOMC. Further Japanese wage-talk reports pointing to higher payments and that helped send USDJPY down to 147.25 but dip buyers were lurking again.
UK GDP report this morning came in slightly higher then previous, as expected, and has had little impact on the Pound but Citi now expect June BOE rate cut versus August where the main consensus is atm. It's all second-guessing which, frankly, I choose to ignore. The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Hezbollah/Red Sea tensions are all still casting their own shadow .
Equities fell then rallied again yesterday and remain underpinned overall on the firm belief that interest rates will be coming down at some stage soon apart from in Japan ofc. WTI capping at $78.40 but holding $77.20 this time in the retreat amid the second-guessing on Red Sea/Gaza and global economy. Gold has retreated further to test $2150 amid the USD demand and some profit-taking after the recent sharp rallies but remains underpinned overall on the belief that FOMC will start cutting rates in June.
GBPUSD: Failure around 1.2800 this time amid the USD demand and some GBPJPY selling but holding 1.2775-80 still as the tight ranges continue. I remain poised for further re-sells when momentum fades as we continue to range overall. EURGBP: Holding 0.8535 but still capping at 0.8550 resistance as the BOE/ECB debates continue. GBPJPY: Testing 188.40 in the retreats but some expected dip support once again helping with rally to 189.20 again this morning as rollercoaster JPY ride continues with BOJ next week in focus.
EURUSD: Support around 1.0905 this time but sellers capping at 1.0935 this morning on the USD demand and ECB rate-cut conjecture. I remain a rally seller as my preferred side. USDJPY: Capping at 148.00 in the latest rally after a hold of 147.20-25 support. I remain a rally seller as preferred side overall but still expecting dip demand amid BOJ conjecture.
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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