Thursday 1 September 2022
Softer risk sentiment to open a new month and firmer USD tones still prevailing overall albeit off its highs as I type. Gold still looking a little soggy as is oil as markets continue to second-guess the Central Banks.
We did indeed get some final month-end flow business yesterday which saw Euro strength again, along with some JPY supply, and further USD demand. GBP and CAD both still looking notably soggy not helped by further cross-pair flows too.
GBPUSD: Fresh lows of 1.1567 in the latest retreat driven lower again by the stronger USD and EURGBP demand. Patience a virtue still but I prefer the rally-sell side. Some decent option interest at 1`.1600 today to keep in mind. EURGBP: Month-end EUR demand/hawkish ECB and some generally soggy GBP tones playing out again yesterday to breach 0.8650 this time. A little reversal since but looking underpinned still overall as markets price in next week's expected 0.75% rate hike from the ECB.
GBPJPY: Softer risk tones and ongoing soggy GBP sentiment has seen new lows of 160.85 and a cap at 161.80 We can expect some fragile price action still.
EURUSD: EUR buying across the board again yesterday but USD demand helping to cap this pair around 1.0080 this time with rally sellers including me still poised. USDJPY: USD demand and month-end JPY supply helping to underpin again yesterday and pushing on through the strong resistance/sell interest at 139.00 but softer risk tones once again helping to cap from fresh highs of 139.68, levels not seen since 1998.EURJPY: Double month-end flow whammy (EUR demand/JPY supply) still helping to underpin this pair but capping around 140.00 this time on softer risk tones. USDCHF: Capping above 0.9800 again this morning helped by softer risk tones, some USD supply and firmer Swiss CPI data. Now finding support at 0.9740 as I type helped by some EURCHF dip demand too with the SNB never far away but sellers poised still on both. EURCHF: Also finding good support of its own at 0.9775 amid the general EUR demand after capping at 0.9830 with sellers ever poised.
AUDUSD: Finding good support around 0.6785 now after the break down through 0.8840 support and now capping around that 0.6840 line.Some decent option interest at 0.6865 in play too. GBPAUD in retreat again as AUDUSD out-performs GBPUSD once more and currently testing 1.6950-60 from 1.7030. NZD holding 0.6080 after failing through 0.6100-20 support and looking a little soggy still as USD remains underpinned overall. GBPNZD still capping around 1.9050 as NZDUSD outstrips GBPUSD with rally sellers still poised but 1.8950 still holding so far. USDCAD: Broken up through 1.3100 as oil price amid the USD demand/softer oil combo along with EURCAD demand/ softer risk CADJPY supply. Expecting some two-way business overall still amid the fickle variables but looks underpinned for the moment.
Let's continue to be careful out there.
Interbank rates: 08.20 BST