Thursday 4 July 2024
Recent USD strength took a knock yesterday after the release of softer than expected US weekly jobless claims and ISM Services PMI. S&P Services data was slightly better than expected though and helped stem lossed. USDJPY led the way again, this time in retreat down to 160.75 but quickly bounced back up to 161.30 then further to 161.75 in a topsy turvey session. JPY demand helped cap other pairs in the USD retreat but this morning some USD supply prevailing again.
Yesterday saw some decent final UK Services PMI data help underpin GBP ahead of today's General Election with polls pointing to a strong Labour Party victory that's been factored in over the past few months so I'm not anticipating much GBP volatility for the moment at least. Exit polls from 21.00 GMT then results through the night. US holiday today and many will still be off tomorrow so expect some thin liquidity for Friday's key US NFP data.
Equities remain underpinned and rallied strongly in NY on the softer data encouraging FOMC rate cut bets albeit with sellers still lurking. WTI dip demand notable again but capping at $83.55 in yesterday's better-risk rally after holding $82.00-20. Falling again this morning as I type. Gold finding a base at $2330-40 this time and pushing up to $2365 before capping. Dip demand should remain but profit-takers/sellers still poised.
GBPUSD: Support coming in around 1.2680 yesterday but failed into 1.2780 on the US data-led rally. 1.2730 holding since and this morning testing 1.2760.EURGBP: Holding 0.8450-55 but capping into 0.8470 as I type. EU and UK politics still casting a shadow along with ECB/BOE rate cut conjecture. GBPJPY: Following USDJPY down then up again. Holding 205.20-30 this time amid the general JPY selling but capping at 2.0620.
EURUSD: Capping at 1.0816 yesterday but holding 1.0675 since amid some general USD supply. USDJPY: Support coming in at 160.75 in the US data-led retreat but bouncing strongly again amid the general JPY supply to post highs of 161.75. MOF/BOJ intervention fears remain but not putting off dip buyers still.
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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