Tuesday 25 January 2022
The latest US Federal Reserve announcement tomorrow may be casting an understandable shadow but that's not stopped markets of all types staging one of the most frenetic days trading in a long while.
Equity markets tumbled for the first part of the day triggering stops and panic selling along the way bringing with it large moves in FX pairs amid the risk-off tones but then came a sharp reversal leaving some traders caught in the headlights on the way back up too.
We've seen some relative calm by comparison in Asian trading as the jury remains on but great two-way business to be had whatever your bias. As ever, a classic case of not over-analysing or second-guessing but keeping your focus on price action in core and cross-pairs and identify recent ranges to see whether we hold or break and what levels present value for money. Patience will invariably be a virtue but don't confuse patience with being stubborn either in entry or exit. He who hesitates is often lost in these trading conditions.
GBPUSD: The break through 1.3530 finally found support at the 1.3430-35 I highlighted in a tweet and some pips banked along the way with some re-sells into the cap at 1.3500 where we also have some option interest today. EURGBP: 0.8375 now providing support after yesterday's beak-up trough 0.8380-00 to test 0.8420 (GBPEUR down to 1.1875) on the risk-off EUR demand. Good two-way business to be had still. GBPJPY: Eventually found support at 153.00 in the latest risk-off retreat but unable to get back through 153.85 as the jury remains out.
I remain a GBP rally seller across the pairs overall as my preferred trading side but being patient as ever. These markets are ever-fickle so good/tight position management essential.
EURUSD: Currently testing 1.1290 lows again amid the better-risk EUR supply and some pips banked. Good size option interest today 1.1300-10 should help contain but much will depend on prevailing risk tones. USDJPY: 114.10 now resistance but still holding 113.-60 amid the mixed risk sentiment. EURJPY: 128.50-60 now the support line but failing at 129.20 amid the mixed risk plays. USDCHF: 0.9110 support held well with SNB ever vigilant and now pushing up through 0.9180 as we see some better risk CHF supply. Prefer to buy the dips still overall but not greedy in the rallies with sellers ever poised. EURCHF: SNB ever vigilant and the rot has stopped at 1.0300 and now 1.0340 back in support play as we break up through 1.0370 with CHF supply now outstripping EUR selling elsewhere.
AUDUSD: Capping at 0.7180 now after the hold of 0.7085 after the risk-off retreat yesterday. USDCAD: 1.2600 broken and now decent support but equally capping at 1.2650-60 amid firmer risk/oil CAD demand.
Offers: 1.2650, 126.75-80, 1.2700, 1.2730, 1.2750, 1.2775, 1.2800
Bids: 1.2620, 1.2600, 1.2575, 125.60, 1.2540, 1.2520-25, 1.2500,
Let's continue to be careful out there in all things. Staying safe must be our main priority still.
Interbank rates: 08.40 GMT
GBPUSD 1.3491
EURUSD 1.1304
EURGBP 0.8379
GBPEUR 1.1934
GBPJPY 153.65
GBPCAD 1.7037
GBPCHF 1.2392
GBPZAR 20.6109
GBPHKD 10.5087
USDJPY 113.91
EURJPY 128.74
EURCHF 1.0372
EURHKD 8.8057
AUDUSD 0.7540
USDCAD 1.2636
USDCHF 0.9175
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