Friday 18 November 2022
Mixed US Dollar tones again this morning but generally softer as the jury remains out while equities, oil and gold still ranging relatively tightly but finding some dip support again after another busy week.
Yesterday's widely anticipated UK Autumn Statement leaves the Pound generally better supported this morning, albeit with a few wobbles in the aftermath, as markets decide that there is a firmer hand on fiscal policy despite the very rocky road ahead. I'm not in agreement with that conclusion but markets are ever fickle so we'll see what pans out over the next few months/years but I stand by my view that it's not a pretty picture. Better than expected headline UK retail sales data earlier helping the Pound meanwhile.
As always, remember that conjecture and second-guessing should stand to one side on data and CB releases. Focus on the price action and let the algos do the heavy lifting/dropping. The important thing is to identify your preferred risk/reward entry/exit levels prior.
GBPUSD: A solid hold of 1.1760 in yesterday's retreat and good two-way business before a further rally this morning, again, to test 1.1950 once more helped by the general GBP demand and softer USD tones. I remain bearish overall and poised to re=sell again with some caution required amid the general USD supply. EURGBP: Testing 0.8700 again as I type after retreating from 0.8770 highs yesterday on the GBP retreat. I expect the two-way business to continue as jury remains out on both currencies and outlook. GBPJPY: Holding 166.30-50 this morning amid some better risk tones and GBP demand but capping a67.20 as I type. I would still expect two-way business as markets remain ever-fickle but with sellers to prevail overall despite a slight upward trend atm.
EURUSD: A solid hold of 1.0330-50 and looking to test 1.0400 again. Should still see some two-way business. Cross flows, risk, Ukraine all in the frame as well as USD flows. USDJPY: A notable cap into 140.80 again yesterday amid some general USD demand but a hold of 139.60 and some JPY better-risk supply helping a bounce above 140.00. EURJPY: Holding 144.50 yet again but failing into 145.50. Expect more two-way business. USDCHF: In retreat again after capping at 0.9550 and now testing 0.9500 as some USD supply returns. Some support from EURCHF holding 0.9780-00 now but sellers poised still. EURCHF: Support at 0.9850-60 area now with SNB watching and helped by some better risk tones but with sellers prevailing at 0.9880 for the moment
AUDUSD: Forming a cap around 0.6725 atm but supported into 0.6680 after yesterday's test and hold of 0.6650 amid the USD demand. NZDUSD supported at 0.6150 now and testing 0.6180 again amid some softer USD tones. . USDCAD: A hold of 1.3300 this morning after capping at 1.3400 yesterday amid fresh USD supply with oil making its mind up still.
Let's continue to be careful out there.
Interbank rates: 08.50 GMT