Tuesday 28 March 2023
An up and down day overall yesterday for risk sentiment and we're now seeing some equity and oil dip demand again to help bring a few USD sellers to the table led by USDJPY but that pair also supported by decent support into 130.50 again and some JPY supply returning. Shorter-date US bond yields also falling to help the USD retreat.
Not a lot in focus today and very limited option expiry interest so we'll look for more of the same cautious pattern with CB second-guessing still the main game and FX pairs making their mind up with month-end flows approaching. Preliminary signalS suggest some moderate USD supply especially versus JPY and AUD but less so against GBP and EUR. Don't forget also that Japanese companies also looking to repatriate JPY for year-end accounting.
Equities on the rise again as European trading gets fully underway while WTI found a base into $70.50 then $71.50 but sellers capping now at $73.25 as I type. Gold has seen a retreat to $1945 amid the better risk tones and failed at $1965 this morning in the limited bounce. Ukraine/Russia war continues to be the main geo-political elephant in the room with ongoing US/China tensions in the mix too currently.
GBPUSD: Capping into 1.2340 again after a decent rally from 1.2240 yesterday after another decent hold of 1.2220. I remain a rally seller still. EURGBP: Capping around 0.8805 yesterday and retreating to 0.8770 as GBPUSD rally outstrips EURUSD but bouncing to test 0.8800 as I type as GBPUSD runs out of steam again. Expect some more two-way trading as core pairs and risk both fluctuate. GBPJPY: Support line at 160.50 now again having broken back up through amid the better risk tones but with rally sellers prevailing around 161.75-85 again as the uncertainty/fickle sentiment continues and core pairs head into reistance areas too.
EURUSD: Decent support building yesterday between 1.0760-80 and a push onto 1.0835 this morning amid the USD supply. Interesting that we're hearing plenty of hawkish comments from ECB but EUR not really reacting in its own right so further rate hikes fully factored in and I remain a rally seller as my preferred side. USDJPY: Failing at 131.80 yesterday after a few attempts on 131.60 and some re-sells duly placed with a retreat amid the USD supply to test 130.50 support this morning but some JPY supply helping to support along with USD selling running out of puff a little.
More analysis across a variety of FX pairs from mike@mspfx.co.uk
Interbank rates: 08.05 GMT
GBPUSD 1.2323
EURUSD 1.0810
EURGBP 0.8772
GBPEUR 1.1400
USDJPY 130.92
GBPJPY 161.36
GBPCAD 1.6826
GBPCHF 1.1277
GBPZAR 22.4776
GBPHKD 9.5817
EURCHF 0.9920
EURHKD 8.4050
AUDUSD 0.6690
NZDUSD 0.6233
USDCAD 1.3633
USDCHF 0.9170
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