Tuesday 25 June 2024
In these ever-fickle markets we've seen some USD selling return but with JPY selling too overall, along with the carry flows, on the cross dips and therefore underpinning core pairs as I've been warning.
Month-end flow signals are pointing to strong USD supply so the current flows are not coincidental. Yesterday USDJPY saw a sudden drop from 159.50 into 158.70 but equally a bounce straight back to from whence it came. We've seen these rapid moves before ahead of real intervention so markets and traders will remain cautious. Data slate light again today albeit with Canadian CPI numbers due with a few more on the CB speaker front too so let's see how the day plays out.
While the CB second-guessing continues remember as always to identify your preferred risk reward levels and let the algos do their thing along with the natural and speculative flows especially in days like today with thin liquidity. Don't get greedy or over-analyse.
Equities still seeing two-way trading amid the CB/political conjecture but remain underpinned albeit with sellers still lurking and an overall retreat in past 24 hours helped by Nvidia tumble. WTI still seeing good dip support and been up further to test $81.80 this time after a hold of $80.30-50 and underpinned still at $81.30 as I type with more two-way expected. Gold still finding a base at $2320 but failing at $2335. Dip demand should remain but profit-takers still poised.
GBPUSD: Support coming in at 1.2650-60 yesterday amid the USD supply and GBPJPY demand but capping into 1.2700 so far as we continue to range tightly. EURGBP: Holding 0.8445-55 again after capping into 0.8480 amid core pair price action and BOE/ECB conjecture. EU politics still casting a shadow too. GBPJPY: Holding 201.00 in yesterday's USDJPY-led tumble and supported now at 201.80-00 this morning amid the general JPY selling but capping above 202.60. Sellers will remain poised but underpinned overall still for the moment.
EURUSD: Capping at 1.0740-45 but a hold of 1.0710-20 once breached and options expired yesterday as we continue to range tightly. Cross flows in play still too. USDJPY: A strong, and sudden, dip into 158.70 after capping above 159.60. An equally rapid rally back there but MOF/BOJ intervention fears remain.
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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