Jury out as Greenback has a wobble

Wednesday 24 August 2022

Awful US PMI data yesterday triggered a USD sell-off accelerated by traders caught on the wrong side and therefore rushing to bail out and we saw an extended retreat. Once that clear-out finished though we saw the recent Greenback demand return but the jury remains out.

Equities have retreated but rallying this morning as I type with oil higher again. Jackson Hole central bank symposium at the end of the week casting a shadow still as markets continue to second-guess the CBs. Some dovish expectation of Powell creeping in. US Durable Goods data today could set the algos off again.

GBPUSD: Yesterday's rally capped at 1.1875 but holding 1.1800 on the retreat so far. I will stand poised for re-sells as we continue to range with patience a virtue still. EURGBP: Looking soggy still after capping at 0.8430 as EUR weakness continues albeit still ranging. Two-way business still envisaged.GBPJPY: Currently capped around 161.80 after yesterday's extended fall led by USDJPY/softer risk found support at 161.20. The risk and USD jury remain out and we can expect some fragile price action still.

EURUSD: Capped yesterday at 1.0020 and now in retreat to 0.9940 with rally sellers including me still ever-poised.

USDJPY: A sharp fall to 135.80 post-US PMIs which both suited and surprised me. Underpinned again though for the moment and holding 136.30. EURJPY: Capped into 136.50 after yesterday's retreat but forming a base now around 135.60.Sellers poised still whenever sentiment turns as I've been warning.USDCHF: Capping at the old 0.9660 line again after yesterday's hold of 0.9600 in the USD sell-off with EURCHF in retreat too with the SNB ever vigilant. CHF demand still notable helped by rate hike expectations. EURCHF: 0.9620 now the new resistance with expected SNB smoothing in the retreat to 0.9575 but the inherent CHF demand still capping rallies too.

AUDUSD: Now finding good support around 0.6900 after the cap at 0.6960 in yesterday's USD sell-off. GBPAUD holding 1.7050 still after the retreat from 1.7120 as GBPUSD retreat outstrips AUDUSD but dip demand in both for the moment.NZDUSD capping at 0.6220 this time amid the firmer USD tones but some dip demand at 0.6180 this morning.GBPNZD holding around 1.9050 after failure above 1.9100 with rally sellers still poised. USDCAD: Capping at 1.2985 amid the firmer oil tones after yesterday's hold of 1.2930. Expecting some two-way business overall though still amid the fickle variables.

Let's continue to be careful out there.

Interbank rates: 08.50 BST

GBPUSD 1.1825

EURUSD 0.9955

EURGBP 0.8416

GBPEUR 1.1881

GBPJPY 161.47

GBPCAD 1.5343

GBPCHF 1.1376

GBPZAR 20.1396

GBPHKD 7.7533

USDJPY 136.50

EURJPY 135.90

EURCHF 0.9582

AUDUSD 0.6923

NZDUSD 0.6200

USDCAD 1.2974

USDCHF 0.9625