Tuesday 3 January 2023
Softer USD tones generally into the end of 2022, albeit going nowhere in a hurry for the most part, have now been replaced by a decent rally in the Greenback as he first full trading day gets underway. No precise explanation but we can often see month/year-end reversals in the first few days of activity with some re-balancing affecting the natural flows.
Equity markets are firmer too but gold is off its highs after pushing up to $1850 earlier in Asia as trading gets off to an lively start. Oil prices also off their Asian highs after a decent rally over the past few sessions. Softer German inflation data this morning will give the markets and ECB something to think about.
Remember, focus on the price action and let the algos do the heavy lifting/dropping. The important thing is to identify your preferred risk/reward entry/exit levels.
GBPUSD: Finally a break of the key/psychological 1.200 level now amid the USD demand ater a failure around 1.2080 then 1.2040-50. Pips banked in the retreat into 1.1900 per ongoing strategy. I remain poised to re=sell and I hope the steer has served you well too. EURGBP: Capping above the old 0.8860 resistance but supported by bids into 0.8820. Ranging as core paairs both retreat but still underpinned overall. GBPJPY: 158.50 proving a decent resistance area per my mention yesterday with sellers prevailing despite some firmer risk tones for the moment, as GBPUSD retreat outstrips USDJPY (still some JPY demand though on the crosses overall) and fresh lows of 155.40 being posted as I type.
EURUSD: The decent 1.0640-60 support now history and triggering stops amid the relentless USD demand this morning. Decent option interest at 1.0580 today. Rally sell still my preference. USDJPY: Another retreat in Asia to test 129.50 before the usd demand kicked in and 131.00 rally/cap. I prefer the rally-sell side still overall. EURJPY: EURUSD retreat sending the pair down to 137.40 helped by general JPY demand as USDJPY caps too. Rally sellers poised now 138.50-00.USDCHF: A strong rally amid the general USD demand/EURUSD retreat after once again holding the 0.9220 support with a little help from EURCHF dip demand again and now testing 0.9380, not seen since mid-Dec. EURCHF: Still holding 0.9840 in the retreat but failure above 0.9880 as EURUSD extends retreat. Good two-way pips still.
AUDUSD: Good support around the 0.6760-80 area now history and testing 0.6700 amid the USD demenad. AUDJPY selling in play too again. I remain a rally seller.NZDUSD capping into 0.6350-60 yet again in Asia amid the USD demand but holding 0.6220 so far. USDCAD: Still holding the 1.3520-25 line I highlighted again yesterday and bids certainly building down there. Good rally since led by the USD buying but move tempered into 1.3640 by firmer oil price to bring more two-way business overall.
Let's continue to be careful out there.
Interbank rates: 08.38 GMT