Monday 30 May 2022
Better risk sentiment aided by China ending COVID lockdowns is helping to produce some JPY and CHF supply again and helping to support core pairs too. Equities are underpinned still as are gold and oil. Another week but on a similar theme for the moment.
US holiday today but we can't assume a Monday malaise. As ever, I repeat my view that it's a case of not over-analysing but keeping your focus on price action in core and cross-pairs. We will continue to trade in ever-fickle markets so the need remains to identify ranges and what levels present value for money. Algos will continue to knee-jerk price action on the variable headlines versus natural flows. Discipline is key as ever.
GBPUSD: Very large option expiries tomorrow casting a shadow with 1.2650 capping but equally 1.2600 supporting amid the firmer USD vs firmer risk containment. I remain poised to sell rallies but timing as ever is crucial.EURGBP: Holding old support lines at 0.8480 on the break of 0.8500 but heading back as I type and helping to put a cap on GBPUSD. More two-way expected.
GBPJPY: Holding 160.00 then 160.50 amid some firmer risk but sellers poised still as the uncertainty continues.
EURUSD: Finding a decent base at 1.0700 and posting 1.0760 as I type helped by some general EUR demand and firmer risk.
USDJPY: 126.80 now providing good support helped by some firmer risk JPY supply. EURJPY: Support now at 136.35-50 but sellers poised once risk sentiment turns sour. USDCHF: 0.9600 still forming a cap but with SNB shadow lurking in the 0.9550 dips
EURCHF: 1.0275 support line for the moment and 1.0300 being tested again as I type . SNB watching still but rally sellers continue to lurk.
AUDUSD: Now finding a base at 0.7130-50 helped by the ongoing AUDJPY and commodity ccy feel-good demand and looking at the decent 0.7200 resistance. GBPAUD now broken down through 1.7700 an testing 1.7575 as AUDUSD rally outstrips GBPUSD. NZDUSD also feeling some love and now supported at the former 0.6525 resistance. GBPNZD finding support at 1.9300 this time after capping into 1.9350 as NZDUSD finds dip demand still. USDCAD: 1.2700 support broken now with amid some CADJPY demand and firmer oil tones.
Let's continue to be careful out there.
Interbank rates: 08.48 BST