Greenback grabbing returns

Wednesday 26 June 2024

I keep saying we're in ever-fickle markets and we've now seen some USD demand return but with JPY selling too overall, along with the carry flows, on the cross dips and therefore underpinning core pairs as I've been warning for a while now.

I mentioned yesterday that month-end flow signals are pointing to strong USD supply so we'll keep an eye on, and into, today's 4pm London fix with the month-end Spot date in play. Stubborn inflation remains a concern for Central Banks with both Canada and Australia reporting stronger than expected CPI readings in the last 24 hours. Data slate light again today but traders will have an eye on US PCE and Durable Goods orders tomorrow. Light on CB speakers too but BOE publish their latest Financial Stability Report tomorrow.

Equities remain underpinned albeit with sellers still lurking and an overall rally in past 24 hours helped by Nvidia finding some dip demand.  WTI seeing good dip support again but still capping into $81.80 with a hold of $80.30-50 still and heading back into $81.30 as I type with more two-way expected.  Gold now finding a base at $2310 after failing at $2335 again. Dip demand should remain but profit-takers still poised.

GBPUSD: Support coming in at 1.2670 after capping into 1.2700 so far as some USD demand returns. More two-way expected as we continue to range tightly. EURGBP: Holding 0.8430 after capping into 0.8450 amid some renewed EUR supply and BOE/ECB conjecture. EU politics still casting a shadow. GBPJPY: Holding 202.10 in yesterday's retreat amid the general JPY selling but capping above 202.80. Sellers will remain poised but underpinned overall still for the moment.

EURUSD: Capping at 1.0720-30 but a hold of 1.0690 so far as we continue to range tightly. Cross flows in play still too and large option contracts at 1.0700 yet again helping to contain. USDJPY:  No intervention-fear wobbles in past 24 hours and support coming in at 159.20-30 amid the renewed USD demand and ongoing JPY supply. MOF/BOJ intervention fears remain.

Traders - For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email mike@mspfx.co.uk