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  • Writer's pictureMike Paterson

Greenback falls in wake of US CPI

Wednesday 15 May 2024

Yesterday's eagerly awaited US CPI data duly got the algos moving but whether it makes the picture any clearer still remains in doubt. Slightly softer MM reading triumphed over the steady core reading helped by softer Retail Sales data. Cue some good two-way USD business after initial spike to the downside but it's those softer tones prevailing this morning amid better risk appetite with jury still out on FOMC but doves winning the day overall.

We've seen USDJPY retreat to test 153.50-60 amid the USD supply and firmer risk tones generally but a bounce as I type as the second-guessing continues. Weekly US jobless claims on the data slate today at 12.30 GMT. The Ukraine/Russia war and Middle East tensions sadly still cast their own very large shadow too. Remember as always to identify your preferred levels and let the algos do their thing along with the natural and speculative flows.

Equities soared on the dovish tones with US markets posting fresh record highs and steady as European trading gets underway bringing with it some better risk appetite again. WTI held $76.50 and now testing $78.50-75 again amid the ongoing variables. Gold held $2350 but capping into $2400. Expect profit-taking to continue in the rallies but appetite for the shiny stuff remains.

GBPUSD: Holding 1.2600 as we waited on CPI and then a sharp rally to 1.2670 in the immediate aftermath then trading 1.2620-70 until one final push into 1.2700 before dropping back into 1.2670 as I type. EURGBP: Capping around 0.8595 then 0.8585 but holding 0.8575 so far as the ECB/BOE rate cut conjecture and cross flows continue.GBPJPY: Good volatility again in the past 24 hours holding 195.00 this morning yesterday after failing at 196.50 amid the JPY demand and extended USDJPY fall post-CPI.

EURUSD: Support around 1.0820-30 pre-CPI and up in a rush after to post 1.0870 before dipping but another hold of 1.0830 (likke GBPUSD at 1.2620) was enough to send the pair back up to post highs of 1.0895 amid the USD supply before dipping again this morning. USDJPY: Support coming in at 153.50 in Asia in the extended retreat but now testing 154.75 again as some USD demand/JPY supply returns.

Traders - For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email

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