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  • Writer's pictureMike Paterson

Firmer risk tones and USD supply returning

Friday 29 September 2023

Seems the month-end USD demand has been completed and with quarter-end book balancing also required we've seen some firmer risk tones as equities rise, USD supply on retreating bond yields and also some JPY selling which is helping to underpin core pairs. Better news out of China also helping and we've seen notable AUD buying therefore as well. One final 4pm London fix still to be aware of for those last minute trades that have to be done.

US PCE and Michigan Sentiment data on the slate today. RBA decision looming on Tuesday.

Equities rose once US markets got going and staying firmer in Asia and early European trading while WTI has retreated after a heady week and capped at $92.50 but holding $90.80 for the moment with overall sentiment still underpinned. Gold finding support around $1860 this time and rallying to test $1875 on the general turnaround amid the US bond yield retreat but with natural sellers ever poised. Geopolitical concerns still very much a threat to market stability with focus on increasing Ukraine/Russia tension but also the Middle East among other areas of conflict.

GBPUSD: The previous 1.2180 cap now providing support after a break up through 1.2200 amid some USD supply returning helped by a little GBPJPY demand on the firmer risk tones and some EURGBP supply continuing. Capping around 1.2250 where we also some option interest today with larger at 1.2300. I remain poised for further rally re-sells. EURGBP: Holding around 0.8640 again this morning and testing 0.8670 again as I type as some GBP supply returns. More two-way business expected. GBPJPY: Capped at 182.70 after holding 181.90 yesterday and again this morning amid some better risk tones and core pairs finding dip demand. Sellers ever poised though still.

EURUSD: A good hold of 1.0530-50 yesterday and a decent rally to post 1.0607 as I type. I remain a rally seller overall.USDJPY: Capping at 149.50 amid the USD supply and ongoing fears of MOF/BOJ intervention into 150.00. Now testing 149.00 after a hold of 148.50-60 helped by some firmer risk JPY supply.I remain a rally seller as preferred side overall at these elevated levels but with patience a virtue as ever.

More detailed analysis across a variety of pairs and 1-2-1 mentoring sessions for traders from

Interbank rates: 08.47 BST

GBPUSD 1.2238

EURUSD 1.0600

EURGBP 0.8663

GBPEUR 1.1540

USDJPY 148.87

GBPJPY 182.17

GBPCAD 1.6463

GBPCHF 1.1132

GBPZAR 22.9688

GBPHKD 9.5350

USDCHF 0.9103

EURCHF 0.9652

EURHKD 8.2625

AUDUSD 0.6477

NZDUSD 0.6026

USDCAD 1.3446

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