Tuesday 23 January 2024
This morning the BOJ left rates and policy on hold as widely expected with Ueda not prepared to give too much away in his press conference but equally ruling nothing out either. I've highlighted strong USDJPY resistance/offers building at 149.00 and support at 147.50-60 which was also the 100 DMA. The top line easily held post BOJ as no surprises but an algo-led knee jerk drover price higher but now the support broken to test 147.00 in the wake of Ueda's presser.
Other currency pairs still in second-guessing mode and ranging albeit with a little USD supply returning. Meanwhile the Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Red Sea tensions still cast their own shadow although reports of a 2-month ceasefire in Gaza must be welcomed. More CBs up the ramp this week too with the ECB, BOC, Norges, and SARB all in focus along with US core PCE and Q4 GDP which will feed into the Jan 31 FOMC second-guessing.
Equities remain underpinned overall still despite being off their extended highs of yesterday. WTI rallied strongly from $72.50 amid some better risk tones and extending recent gains before capping at $75.50 with sellers poised still despite Red Sea concerns. Gold held $2015-20 this time but capping above $2035 as we continue to range tightly.
GBPUSD: Capping at 1.2750 after holding 1.2680 amid some USD supply but sellers helped by GBPJPY supply post-BOJ. I remain poised for further sells when momentum fades but patience still required. EURGBP: Capping around 0.8575 now amid some general GBP demand again but holding 0.8555 in the retreats still as the CB jury remains out. ECB on Thursday in focus.GBPJPY: Capping this time into 188.90 then 188.20-30 post-BOJ but a hold of 187.25 in the retreat so far. We can expect rally sellers to remain poised amid all the uncertainty in these ever fickle markets but still seeing some decent dip demand for the moment.
EURUSD: Support coming in at 1.0875 helped by the general USD supply and climbing back up to 1.0915 this time. I remain a rally seller. ECB on Thursday.USDJPY: Finding support at 147.00 after capping at 148.56 (ahead of that 149.00 line in the sand I mentioned) on the algo-led bounce on BOJ headlines. I remain a rally seller as preferred side overall but caution/patience still required for the moment.
For more detailed analysis across a larger number of FX pairs email mike@mspfx.co.uk
Interbank rates: 08.18 GMT
GBPUSD 1.2732
EURUSD 1.0902
EURGBP 0.8562
GBPEUR 1.1678
USDJPY 147.40
GBPJPY 187.67
GBPCAD 1.7140
GBPCHF 1.1048
GBPZAR 24.3095
GBPHKD 9.9088
USDCHF 0.8673
EURCHF 0.9456
EURHKD 8.4850
AUDUSD 0.6595
NZDUSD 0.6100
USDCAD 1.3468
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