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  • Writer's pictureMike Paterson

Another month almost done

Friday 31 May 2024


As we near the end of May we find markets still trying to second-guess the central banks and still waving wet fingers in the air.


The Greenback has given up some latest gains as equity markets found a bit of dip demand. Month-end flows are USD negative as we know so we can't rule out some final book tidying being behind USD supply returning yesterday as well as softer US bond yields. Look out for any action into the final 4pm London fix but don't expect large related moves at this late stage. Some USD demand returning this morning as we continue to range tightly.


More US PCE data today and Canadian GDP plus a few options in play again today too. Ukraine/Russia war and Middle East tensions sadly still cast their own very large shadow. 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 fell again yesterday but finding some dip demand in Asia/early Europe albeit with profit-takers still lurking as the CB second-guessing continues. WTI has also fallen again from $79.00 but holding $77.30-50 so far.  Gold rallied again given the inherent dip demand I've been highlighting but capped around $2350 and now finding support at $2335 with some profit taking still expected but appetite for the shiny stuff in the dips remaining


GBPUSD: Capping at 1.2750 again but a hold of 1.2700 in the retreat amid the variable USD and GBPJPY flows. I remain a rally seller per ongoing strategy. EURGBP: Holding around 0.8500 again and now pushing up through 0.8515 amid some additional GBP supply. Expect more two-way as the ECB/BOE rate cut conjecture and cross flows continue.


GBPJPY: Holding 199.00-30 with core pairs finding dip demand and now pushing onto 200 again. Sellers will remain poised in these fickle markets but I'm still expecting dip buyers too.


EURUSD: Holding 1.0810-20 in the retreat from 1.0845 but now pushing back up through pivotal 1.0830-35 as we continue to range tightly. I remain a rally seller as my preferred side. USDJPY: Support coming in at 156.50-60 yet again and now testing 157.20-25 as some USD demand returns.


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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