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  • Writer's pictureMike Paterson

Greenback grabbing notable again

Thursday 14 July 2022

Higher US inflation data then BOC hiking by 100bps has got markets very excited about the Fed lifting by the same amount and we've seen USD demand across the board with USDJPY leading the way to break up through 139.00 for the first time since 1998. Equities, gold and oil all lower again but little evidence of any JPY risk-off demand so far. The opposite is true in fact amid the rampant USDJPY rally and helping to support core pairs too with EURUSD holding parity this morning after yesterday's brief break and rally to 1.0125.

A strong Aussie labour report has markets looking for 75bps rate hike and latest BOE expectations are for 175bps by year-end. Political uncertainty continuing to provide a GBP backstory that will continue until Sept 5 when the new PM is announced. Second ballot today which will trim the list down further from the current 6 runners left from yesterday's vote.

As always, don't over-analyse but be ready with your preferred levels/strategy, place orders and let the algos do the heavy work. Discipline is key as always but equally hesitation can often ruin a great idea.

GBPUSD: Capping into 1.1965 yesterday and some re-sells duly placed along the way per ongoing strategy but supported at 1.1825 in the retreat with a bit of help from the GBPJPY demand.. I remain poised to sell rallies. Timing as ever is crucial.

EURGBP: Previous cap at 0.8440 now providing support as the Euro pressure fades a little but capping now at 0.8470 as jury remains out. I still think we'll see two-way pips overall.GBPJPY: Holding 164.00 then 164.50 and now breaking 165.00 amid the USDJPY surge higher. Not sure when/where this stops but I'll be poised....

EURUSD: Capped at 1.0125 after yesterday's brief parity break but another test which has held this morning. Barrier option gone but good tech support behind at 0.9980 still as I've been warning. Ukraine, Russian gas supplies, ECB, recession remain the focus.USDJPY: A good hold of 137.00 yesterday in the retreat from 137.85. Surge higher since with 140.00 seemingly being targeted but no gurantees after such a one-way move. EURJPY: Support at 138.00 as USDJPY drags it higher helping EURUSD to hold 1.0000 again. Sellers poised still.USDCHF: Support at 0.9800-20 returning amid the firmer USD and EURCHF tones in these ever fickle times. Jury remains out on SNB and amid variable risk but CHF still in demand as further tightening expected.

EURCHF: Holding 0.9830-40 0.9860 supported by EUR demand elswhere and some SNB support still I reckon but sellers prevailing at 0.9880 so far.

AUDUSD: Capped at 0.6800 but holding 0.6730 with strong jobs/wages data helping support with a RBA hike on 75bps being priced in. GBPAUD currently testing 1.7575 after holding 1.7475. NZDUSD capping into 0.6130 and now breaking down thru 0.6100 as I type amid USD demand. Large options at 0.6120 in play. GBPNZD bids into 1.9350 again after holding 1.9340 and now testing 1.9440. USDCAD: Fun nad games after yesterday's BOC rate hike coinciding with those large 1.3000 options rolling off at the same time per my info here and tweets. Now a base between 1.2980-00 again after those 1.2940 lows and testing 1.3050 again on the firmer USD/softer oil double whammy.

Let's continue to be careful out there and have a good week everyone.

Interbank rates: 08.37 BST

GBPUSD 1.1861

EURUSD 1.0027

EURGBP 0.8457

GBPEUR 1.1823

GBPJPY 164.80

GBPCAD 1.5465

GBPCHF 1.1668

GBPZAR 20.2302

GBPHKD 9.2311

USDJPY 138.89

EURJPY 138.35

EURCHF 0.9867

EURHKD 7.8077

AUDUSD 0.6772

USDCAD 1.3011

USDCHF 0.9832

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