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  • Writer's pictureMike Paterson

Fragile risk sentiment again

Tuesday 10 January 2023

Equity and oil/commodity markets have had another wobble and we've seen some USD demand return as the two-way business continues in 2023 and the jury remains well and truly out.

Data focus is still the latest US CPI reading on Thursday but Fed Chair Powell, BoE Governor Bailey, ECB member Schnabel will speak at Riksbank in Stockholm from 09:30 GMT today with Powell likely to try and steer markets on mon pol at 14.00 GMT. China are continuing with their re-opening boost plans but I remain cynical amid the rapidly rising COVID cases and general global economic downturn. Ukraine/Russia war continues to be the elephant in the room amid other geopolitical risk.

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: A good cap around 1.2200 as I highlighted on Twitter but demand into 1.2130, EURGBP rally gelping to cap. EURGBP: Breaking down to look at 0.8760 yesterday amid the initial GBPUSD demand but holding well and now 0.8830 as I type as GBPUSD retreats. GBPJPY: 160.00 proving a decent support area again but some softer risk tones capping at 161.00.

EURUSD: A solid hold of 1.0650 then 1.0700 in yesterday's rally to now look at 1.0750 this time and looking underpinned again for the moment with a fresh base forming at 1.0720 this morning..USDJPY: Holding 131.30-40 again in the latest retreat mid softer risk tones after 132.50 proved a step too far. EURJPY: We've been up to test 142.00 after a good hold of 141.20 area with core pairs both finding dip demand despite the generally softer risk tones with these markets are ever-fickle. USDCHF: CHF demand still notable with EURCHF retreating again too and a further fall in this pair to finally break down through the 0.9220 support area I've been highlighting.Stops triggered to send it down to look at 0.9160-70 before bouncing but sellers still poised. EURCHF: Support at 0.9850 held well but another cap into 0.9900 amid some ongoing CHF supply but bids now into 0.9860 amid some EUR demand too.

AUDUSD: Good cap at 0.6950 amid some softer risk/commodity tones with AUDJPY selling notable but equally good demand into 0.6880 as the jury remains out. Still Keep an eye on AUD crosses for further clues. GBPAUD: Held 1.7580 in latest retreat and now testing 1.7650 again as core pairs make their mind up. NZDUSD: Support still coming in at 0.6350-60 after failing above 0.6400 again. GBPNZD: Still in the 1.8950-1.9150 range as core pairs range too. USDCAD: Flatling currently amid the fickle USD and oil price. Sellers poised 1.3425-50 now but bids building into 1.3350 still Expect more two-way business overall.

Traders can take advantage from my daily emails, far more detailed than this summary aimed at my physical delivery clients, plus 1-2-1 mentoring sessions. Contact me for more details.

Let's continue to be careful out there.

Interbank rates: 08.45 GMT

GBPUSD 1.2160

EURUSD 1.0730

EURGBP 0.8826

GBPEUR 1.1327

GBPJPY 160.28

GBPCAD 1.6270

GBPCHF 1.1203

GBPZAR 20.7260

GBPHKD 9.4804

USDJPY 131.91

EURJPY 141.54

EURCHF 0.9880

EURHKD 8.3697

AUDUSD 0.6900

NZDUSD 0.6374

USDCAD 1.3396

USDCHF 0.9206

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