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  • Writer's pictureMike Paterson

Greenback being grabbed still as NFP data looms

Friday 6 January 2023

Some good two-way business again as markets make their minds up but we're still seeing some USD demand as markets take a more hawkish FOMC stance, plus yesterday's strong US ADP jobs reading bringing expectations of good NFP jobs/wages data today at 13.30 GMT. How much USD demand has already been factored in will be the question but the algos won't care initially.

Equity and oil prices are softer but off their lows as I type but Gold is looking underpinned still albeit failing to make any further headway as the risk jury remains out. China continuing with their re-opening boost plans giving some support but I remain cynical, and 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: 1.2000 finally giving way again yesterday amid the USD demand and then a break of the bigger 1.1900 level in a solid retreat. I remain poised to re=sell per ongoing strategy.EURGBP: Holding 0.8820 again but capping at 0.8860 this time. Ranging still as core pairs both retreat but remains underpinned. GBPJPY: 159.00 proving a decent support area again after dip into 158.50 on the GBPUSD retreat.160.00 sellers still prevailing for the moment though amid the uncertain risk tones.

EURUSD: The 1.0580 support line broke yesterday triggering stops amid the USD demand and now 1.0540 providing a decent cap as we wait on NFPs and I remain a rall-seller. Rinse n repeat still. Don't over think it. USDJPY: Holding 132.00 then 133.00 and we've seen another strong rally to post 134.45 as USD demand prevails. EURJPY: USDJPY rally outstripping EURUSD retreat again and we've been up to test 141.35 after a good hold of 140.00 then 140.50. Looks underpinned still but these markets are ever-fragile.USDCHF: A solid rally amid the firmer USD tones with EURCHF also in rising and we've broken clear of 0.9360 to test 0.9400 in a rush, last seen just three days go in this roller-coaster start to 2023. EURCHF: Support at 0.9830-40 still and some CHF supply returning as USDCHF rallies strongly triggering stops. Good two-way pips still overall as we continue to range.

AUDUSD: Good support around the 0.6800 area broken yesterday eventually amid the relentless USD demand and a decent retreat to test 0.6725-30 bids/support. Keep an eye on AUD crosses too. NZDUSD: That old 0.6260 support line I highlighted yesterday now broken and becomes resistance as the pair retreats into 0.6200 as USD demand prevails.

USDCAD: Holding 1.3500 then 1.3550 and now posting 1.3620 amid the softer oil/firmer USD tones. Sellers poised 1.3650-75 Expect more two-way business overall.

Let's continue to be careful out there.

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