Monday 16th January 2023
The Bank Of Japan are in focus for their latest policy meeting starting tomorrow and as markets keep second-guessing the central banks we're continuing to range with USD demand returning in a rush this morning.
Equities and WTI continue their own rollercoaster ride and in retreat again as I type after solid gains on Friday while Gold has also capped at $1930 and falling back amid the USD uncertainty. China continue with their re-opening boost plans but I remain cynical amid the rapidly rising COVID cases and general global economic downturn. Ukraine/Russia war continues to be the elephant in the room amid other geopolitical risk. BOE's Bailey & Co testify before the parliamentary Treasury Select CommIttee at 15.00 GMT.. US holiday today with equity and bond markets closed too.
GBPUSD: Still very lively two-way business whatever you preference and capping in the larger resistance area of 1.2280-00 after finally breaking up through 1.2250 in Asia but now in rapid retreat amid the USD demand. EURGBP demand and GBPJPY supply still helping to cap. BOE's Bailey testifying today (see above). EURGBP: 0.8850 area still providing good support but capping into 0.8900 again and ranging still as core pairs make their mind up. GBPJPY: Finding a little support from its latest lows of 155.65 amid the USDJPY demand. Rally sellers will be poised again.
EURUSD: Underpinned at 1.0780 with support through the crosses too and a solid rally again before running out of steam into the strong 1.0880 resistance.USDJPY: Now testing 128.80 again where we capped on Friday but holding 127.25 in the Asian retreat. EURJPY: A hold of 138.00 on Friday but capping at 139.25 in this morning's rally as we continue to see good two-way business. USDCHF: Good two-way action still on this pair too as USD fluctuates and EURCHF consolidates. A good hold of the old 0.9220 support line but failing into 0.9280 in this morning's rally with sellers ever poised too. EURCHF: Some expected sell interest prevailing after last week's over-extended rally (which I noted here on Friday) and capping at 1.0060.
AUDUSD: Good hold of 0.6920 then 0.6950 on Friday but the USD supply-led rally finally failed at 0.7020 and a sharp reversal to 0.6940 this morning as USD demand returns. Still keep an eye on AUD crosses for further clues. NZDUSD: Support coming in at 0.6340-50 agai on Friday but failing around 0.6420 again as USD demand returned and testing 0.6360 in the retreat.
USDCAD: Capped at 1.3440 on Friday but holding the old support line of 1.3350-60 in Asia on the firmer USD/softer oil double whammy but capping at 1.3420 so far.
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Let's continue to be careful out there.
Interbank rates: 07.47 GMT