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  • Writer's pictureMike Paterson

Jury remains out as markets keep second-guessing

Tuesday 10 May 2022

Still going up and down and round and round as the various uncertainties play out on markets with softer risk tones still prevailing overall.

Equities are off their rally highs this morning, as is gold while oil nudges higher off its lows amid OPEC output news and firmer USD continues overall but ranging still for the moment after yesterday's sell-off found the expected dip buyers and again this morning so far.

For new and older readers alike I repeat my view that it's still a case of not over-analysing but keeping your focus on price action in core and cross-pairs.Continue to identify ranges and what levels present value for money. Algos will continue to knee-jerk price action on the variable headlines. Discipline is key as ever.

GBPUSD: Great two-way business in the past 24 hours per my tweets and I remain poised to sell rallies as ever.EURGBP: Holding 0.8550 atm iand heading up to test 0.8580-85 as I type. I expect dip demand to continue albeit rally sellers poised amid uncertain EUR/ECB outlook. GBPJPY: Now holding 160.00 after the break lower through good 160.50 support but now 160.65 this morning after failure at 161.50 as softer risk tones prevail.

EURUSD: Capped into 1.0600 in yesterday' extended rally as USD retraced and EUR found dip demand on the crosses again. Some caution required still with good dip demand on the crosses too.USDJPY: Finding a base now at 129.80 in the latest retreat amid some firmer USD tones but rallies still tempered by some risk-off JPY demand. Good two-way expected still. EURJPY: Support at 137.00 now as the Euro finds general dip demand as does USDJPY but 138.00 area still capping.USDCHF: Support now at 0.9880-00 per recent trend amid generally firm USD tones and with EURCHF finding more dip demand with the SNB never far away.Sellers remain poised though as the uncertainty continues.EURCHF: A good hold of 1.0420 this time with the SNB lurking in the dips and core pairs finding good dip demand despite the soggy risk tones so rally sellers poised saround 1.0500 so far.

AUDUSD: Another retreat and a test of 0.6900-10 after breaking down through 0.6950 amid the general USD demand and some general risk-off commodity currency supply. GBPAUD holding 1.7500 as AUDUSD retreat outstrips GBPUSD and now capping at 1.7850 in the extended rally. NZDUSD fell down through 0.6300 in its own retreat but holding 0.6285 and capping now at 0.6350. GBPNZD holding 1.9400 now after finding a base below 1.9350 and a steady rally to 1.9600-20 before retreating.USDCAD: Finding a base at 1.2935 where we have very large option interest today and steady rally to 1.3035 amid the softer commodity currency tones but retreating to 1.2995 as I type as oil nudges higher.Still looking underpinned for the moment but keep your eyes on that option interest today/tomorrow.

Let's continue to be careful out there.

Interbank rates: 08.37BST

GBPUSD 1.2337

EURUSD 1.0575

EURGBP 0.8572

GBPEUR 1.1663

GBPJPY 160.80

GBPCAD 1.6030

GBPCHF 1.2254

GBPZAR 19.8715

GBPHKD 9.6057

USDJPY 130.36

EURJPY 137.86

EURCHF 1.0500

EURHKD 8.2355

AUDUSD 0.6956

USDCAD 1.3013

USDCHF 0.9928

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