Calm before another storm?

Wednesday 23 February 2022

A few sanctions imposed on Putin and his circle of trust with threats of more and the world waits for his next move. Some better risk sentiment evident this morning amid the relative wait-n-see calm after yesterday's lively ride in FX pairs and we're seeing a rally in equities and some renewed JPY and CHF supply sending cross and core pairs higher. Commodity currency strength notable.

Gold remains underpinned as does oil but both off their highs. The Euro is finding some dip demand again after a interestiong 24 hours across the board. A reminder that preliminary month-end flow signals point to some USD demand particularly USDJPY and we're seeing that still play out with the pair reluctant duly finding support.

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. BOE MPC members testify this morning to UK Parliament committee at 09.30 GMT.

GBPUSD: Duly finding a good hold of 1.3540-50 again but sellers poised still into 1.3600-25. EURGBP: A strong rally to test 0.8380-00 yesterday and duly failing after the extended move from the 0.8300-10 lows 24 hours earlier. GBPJPY: Finding support at 156.20 now amid the firmer risk tones with core pair dip demand notable. Caution still required atm amid risk-off/on uncertainty.

EURUSD: A good hold of 1.1320 now after failing above 1.1360 in yesterday's notable rally and retreat.Now back up to 1.1345 amid some general EUR demand but sellers poised amid the mixed risk and USD tones. USDJPY: Support around 115.00 now after yesterday's option-led cap at 115.20-25 per my tweets EURJPY: Finding demand/support around 130.00 now and back up through 130.50 but sellers poised amid the uncertainty and variable EUR sentiment currently being seen. USDCHF: 0.9180-00 support notable now as EURCHF recovers some poise with SNB ever vigilant and a large option addition yesterday but sellers poised still. EURCHF: Forming a base at 1.0400-20 with SNB casting its shadow but helped by some general EUR dip demand and better risk tones.

AUDUSD: Good support at 0.7200-20 since the large option expiry helped yesterday and supported now by better risk AUDJPY and AUDCHF demand. USDCAD: Capping at 1.2760 again and now 1.2740 offers building amid the commodity currency support as the mixed risk/oil tones continue.

An away point for the mighty Shrimpers and a fair result given we weren't at our best for periods of the game but unbeaten in 10 now......

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

Interbank rates: 08.15 GMT

GBPUSD 1.3607

EURUSD 1.1335

EURGBP 0.8330

GBPEUR 1.2003

GBPJPY 156.57

GBPCAD 1.7313

GBPCHF 1.2530

GBPZAR 20.4040

GBPHKD 10.5944

USDJPY 115.05

EURJPY 130.43

EURCHF 1.0442

EURHKD 8.8287

AUDUSD 0.7246

USDCAD 1.2729

USDCHF 0.9212