Monday 8 April 2024
The key US NFP jobs/wages data on Friday came in stronger than expected which naturally brought with it some USD demand. These markets are still not ready to go anywhere in a hurry though and we quickly saw the gains pared amid strong equity markets and expectations of FOMC rate cut in June falling.
The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Hezbollah/Red Sea tensions still cast their own shadow but talk of more conciliatory tones and Iran's lack of retaliation to recent attacks have given some fresh hope and better risk tones. Fed speakers today feature Goolsbee and Kashkari and SNB's Jordan plus BOE Dep Gov Breeden. RBNZ and BOC policy decisions on Wednesday plus key US CPI data then ECB next CB off the rank on Thursday along with US PPI.
Should be a busy week ahead so remember as always to identify your preferred risk reward levels and let the algos do their thing along with the natural and speculative flows. Don't get greedy or over-analyse. These are tight ranges and will produce regular jobbing opportunities therefore while the jury remains out.
Equities rallied strongly in NY amid the strong jobs data creating renewed risk appetite and remain underpinned in Asia while WTI has retreated on the seemingly reduced Middle East tensions and capped above $87.00 but holding $84.00 as the second-guessing continues. Gold has posted fresh record highs of $2350 as the shiny stuff retains its allure amid inflation fears and reports of Central Bank buying again but capping there and some profit-taking taken it back down to $2330 this morning
GBPUSD: A cap around 1.2640 and retreat to test 1.2570-80 support post-NFPs before a bounce back to 1.2640. I remain a rally seller as we continue to range overall.EURGBP: Failing around 0.8585 again but holding 0.8570 still amid the ongoing ECB/BOE rate cut conjecture too. GBPJPY: Capped at 191.80-00 after holding 190.80 then 191.40 amid the better risk tones and core pair dip demand. Sellers will remain poised but some caution still required for the moment.
EURUSD: Support around 1.0790-00 after capping into 1.0850 post NFPs only to bounce back as we continue to range. I remain a rally seller as my preferred side. ECB looming Thursday.USDJPY: Duly testing 151.80-00 after the better-risk bounce from 151.20-30 amid the JPY supply. I still prefer to play from short-side but once again expecting dip demand for the moment. Patience a virtue as ever here.
Traders - For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email mike@mspfx.co.uk
