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  • Writer's pictureMike Paterson

Jury out again

Friday 17 May 2024

It's been an interesting week to say the least but as it draws to a close markets are generally in buoyant mood albeit with the jury still out on rate cut timings both from the FOMC and other CBs which is producing some good two-way FX business.

We've seen USDJPY rally to test 155.90-00 amid the USD demand and in initial better-risk JPY supply and that cross flow helped to underpin core pairs albeit reversing a little today. Not much on the data slate today but we do have the final EZ CPI reading shortly.The Ukraine/Russia war and Middle East tensions sadly still cast their own very large shadow too. Remember as always to identify your preferred risk reward levels and let the algos do their thing along with the natural and speculative flows. Don't get greedy or over-analyse. These markets will continue to produce regular jobbing opportunities while the jury remains out.

Equities posted fresh record highs but we've seen some profit-taking/correction since but steady-ish as European trading gets underway bringing with it a little risk appetite again. WTI held $78.00 but capping at $79.30-50 amid the ongoing variables. Gold held $2370 but capping into $2390 this time. Expect profit-taking to continue in the rallies but appetite for the shiny stuff remains.

GBPUSD: Holding 1.2645-50 in the retreats but capping at 1.2680 as some USD demand returned. EURGBP: Capping around 0.8590 but holding 0.8575 again so far as the ECB/BOE rate cut conjecture and cross flows continue. GBPJPY: Holding 196.00 then 196.60 amid the renewed JPY supply/USDJPY rally but failing at 197.35. Sellers will remain poised in these fickle markets but still expecting dip demand too as I've been warning.

EURUSD: Capping at 1.0875 yesterday amid the USD demand returning and dipping again this morning to 1.0845 as I type. USDJPY: Support coming in at 154.80-00 yesterday amid the USD demand/JPY supply double-whammy and now testing 156.00 again.

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

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