Greenback grabbing returns

Mike Paterson
Oct 13, 2023
2 min read

Friday 13 October 2023

Yesterday's keenly awaited CPI data came in generally above expectations which helped give the US Dollar some support but it was the latest 30-year US bond auction which went badly to say the least and we saw yields rise strongly in the 10s which in turn gave the Greenback another shove higher. Some supply returning this morning and the ongoing geopolitical risk amid the awful events in Israel/Gaza continues to bring undertandable caution. Risk sentiment is generally softer again and that helped to cap JPY and CHF crosses and therefore core pairs too but steadier in Asia and early Europe.

Equities fell sharply yesterday and again after the bond auction with yields rising and with one eye on the Middle East but steadier into the NY close and since. WTI has found support around $81.50 in its latest extended risk-off retreat again and back testing old support/now resistance at $84.00 with the jury still out amid the uncertain global economic picture too. Gold finding support around $1865-70 now and testing $1885 amid the fragile risk but with natural sellers ever poised still. Geopolitical concerns still very much a threat to market stability with focus on increasing Ukraine/Russia tension and now with the Middle East sadly to the fore.

GBPUSD: Capping around 1.2335 and some re-sells duly placed above 1.2300 when momentum faded. Sharp retreat into 1.2160 on the USD demand. I remain poised for further re-sells when momentum fades. EURGBP: Holding 0.8620-25 again but capping at 0.8650-55 this time. More two-way business expected as core pairs fluctuate. GBPJPY: Holding 182.30 again in yesterday's retreat amid the softer risk tones but capping at 183.00 so far with rally sellers ever poised still.

EURUSD: The old 1.0520-30 support area holding the extended retreat but capping at 1.0560 so far as the jury remains out and some large options come into play as I warned yesterday. I remain a rally seller overall. USDJPY: 149.00 holding yesterday helped by some initial better risk JPY supply before the sharp rally post CPI and auction but rallies capping around 149.80 again with JPY demand again and MOF intervention fears. I remain a rally seller as preferred side overall at these elevated levels but with patience a virtue as ever.

More detailed analysis across a variety of pairs and 1-2-1 mentoring sessions for traders from mike@mspfx.co.uk

Interbank rates: 08.35 BST

GBPUSD 1.2215

EURUSD 1.0552

EURGBP 0.8637

GBPEUR 1.1576

USDJPY 149.65

GBPJPY 182.84

GBPCAD 1.6690

GBPCHF 1.1068

GBPZAR 23.1787

GBPHKD 9.5116