All eyes on Ukraine still

Monday 21 February 2022

Ukraine still dominating the headlines and mixed risk plays helping to contain FX ranges still as I warned yesterday amid all the unknowns but a little better sentiment on reports that Biden ans Putin may have summit talks if Russia does not invade Ukraine but that still remains a distinct possibility with drills in Belarus having been extended.The Beijing Winter Olympics are now over too and therefore not to be overshadowed causing Russia to offend China.

Equity markets are once again off their lows after another wobble late Friday while oil is off its rally highs but underpinned still and making its mind up as is Gold after another failure above 1900 but remains solid amid the uncertainty. Threats from US and UK that they would prohibit Russia trading in USD and GBP has given EUR pairs a small lift. Holidays today in US and Canada. Lots of PMI flash data today but not important right now.

The guessing game will continue and keep the headline-algos jumping on hot coals still. Meanwhile conjecture over Central Bank rate hikes also continues to add more uncertainty into the mix.

GBPUSD: Another good hold of 1.3580 then 1.3600 again as the pair continues to find support overall from softer USD but still contained. EURGBP: A decent rally from 0.8320 on some general EUR demand but falling through 0.8350 again. Mixed risk helping to contain as the uncertainty remains.

GBPJPY: Finding support at 156.20 as risk tones firm up but failing at 156.80 so far as core pairs remain contained. Caution still required atm amid risk-off/on uncertainty.

EURUSD: A good hold of 1.1310-20 but 1.1380-00 sellers still prevailing amid the mixed risk and USD tones.

USDJPY: That old support around 114.80 still holding the latest retreat as I type after another cap around 115.20. EURJPY: Solid hold of 130.00 amid the better risk tones and general EUR demand combo but capped at 131.00

USDCHF: 0.9200 support broken again to test the next layer at 0.9180 as EURCHF holds 1.0400 but sellers still poised on both amid the uncertainty. SNB ever vigilant. EURCHF: 1.0450 support broken in Friday's risk-off retreat but 1.0400 holding as USDCHF finds a support line at 0.9180 again but sellers now poised 1.0460-80

AUDUSD: Good two-way business between 0.7160-0.7230 amid the mixed risk tones. Large option interest tomorrow in play.USDCAD: Capping at 1.2760 but finding support at 1.2720 after Friday's hold of 1.2680 amid the mixed risk/USD/oil tones. Decent option interest lurking tomorrow.

Let's continue to be careful out there in all things. Staying safe must be our main priority still. Have a good week ahead.

Interbank rates: 08.07 GMT

GBPUSD 1.3629

EURUSD 1.1381

EURGBP 0.8350

GBPEUR 1.1975

GBPJPY 156.65

GBPCAD 1.7351

GBPCHF 1.2527

GBPZAR 20.6300

GBPHKD 10.6178

USDJPY 114.93

EURJPY 130.80

EURCHF 1.0455

EURHKD 8.8659

AUDUSD 0.7218

USDCAD 1.2732

USDCHF 0.9195