Wednesday 10 April 2024
Markets still ranging tightly ahead of the key US CPI data today at 12.30 GMT with the jury still out on whether the FOMC will cut in June, or lately indeed whether they will be able to cut at all this year given the recent strong US data.
Earlier the RBNZ left rates on hold at 5.5% but with hawkish tones saying "interest rates need to remain at a restrictive level for a sustained period" so we've seen some solid gains in NZD pairs. The latest BOC policy decision later today comes with increasing speculation on which way they might go, then ECB the next Central Bank off the rank tomorrow along with US PPI.
The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Hezbollah/Red Sea tensions still cast their own shadow. Should be a busy day ahead so 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 remain underpinned and have rallied well after yesterday's retreat which saw risk appetite wobble before current normal service resumed while WTI has traded tightly again amid the Middle East unknowns and capped above $86.00 but holding $84.60 as the second-guessing continues. Gold has once again posted fresh record highs of $2364 as the shiny stuff retains its allure amid inflation fears and reports of Central Bank buying again.
GBPUSD: A cap around 1.2710 after yesterday's rally from 1.2660 helped by GBPJPY demand and EURGBP supply. Softer risk-led retreat back into 1.2660 but a good hold since on the better risk returning. I remain a rally seller as we continue to range overall. EURGBP: Failing around 0.8575 this time but holding 0.8555 in the extended retreat amid the ongoing ECB/BOE rate cut conjecture. ECB looming tomorrow. GBPJPY: Good two-way business amid the variable risk appetite in past 24 hours. Capped at 192.85 but holding 192.00-10 amid the better risk tones returning and core pair dip demand. Sellers will remain poised but some caution still required for the moment.
EURUSD: Support around 1.0845 this time after capping into 1.0885 as we continue to range. I remain a rally seller as my preferred side. ECB looming tomorrow. USDJPY: Testing 151.80-00 again amid the better-risk tones returning after holding 151.55 in yesterday's retreat. I still prefer to play from short-side but once again expecting dip demand for the moment.
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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