Monday 25 July 2022
US Dollar, equities, gold and oil all mixed but off the session lows as I type with markets trading tightly ahead of the latest, and eagerly anticipated, US Fed rate/policy announcement this Wednesday.
The preliminary estimate of July’s month-end FX hedge rebalancing needs indicate net USD selling with usual needs in all currencies except EURUSD.
As always, don't over-analyse but be ready with your preferred levels/strategy, place orders and let the algos do the heavy work. Discipline is key as always but equally hesitation can often ruin a great idea.
GBPUSD: Holding 1.1960 after Friday's cap around 1.2060 .Poised for rally resells as ever. EURGBP: Capping at the old 0.8520-25 pivot level but holding 0.8480-85 support lines. I still think we'll see two-way pips overall as the jury remains out. GBPJPY: Now finding a base at 163.00 then 163.50 and testing 164.00 as I type as the JPY/risk jury remains out.
EURUSD: Good two-way business to be had still on this pair too. Underpinned now at 1.0180 but capping at 1.0250. Some option contract interest in play again. USDJPY: Holding 135.50 in Friday's sell-off but failing into 136.60 on the rally.
EURJPY: Support around 138.75 now but capping at 139.50. Sellers poised still whenever risk turns and/or reality checks back into town. USDCHF: Support now at 0.9620 after a good hold of 0.9600 but failure at the previous support line at 0.9660 since amid the mixed USD/risk tones. SNB will be keeping an eye on things as ever. EURCHF: Capping at 0.9860 but holding 0.9820 again as we range tightly amid mixed risk and EUR tones. SNB will be watching.
AUDUSD: A good cap at 0.6980 this time but holding 0.6880-00 in the retreat with good option interest in the mix again today. GBPAUD holding 1.7300 in latest retreat but tightly bound still after capping at 1.7400.NZDUSD capping at 0.6275 after extended rally to 0.6300 on Friday's USD sell-off but still holding 0.6220. GBPNZD holding 1.9150 this time after after Friday's extended retreat and test of 1.9050. USDCAD: A solid base at 1.2820 in Friday's USD sell-off but latest cap at 1.2940 and retreating to 1.2900 amid some CADJPY demand. I expect some good two-way business still overall amid the variable risk/oil and USD tones.
Let's continue to be careful out there and have a good week.
Interbank rates: 08.55 BST