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  • Writer's pictureMike Paterson

Markets in a whirl still as we wait on US CPI data

Thursday 10 November 2022

Aside from all the geopolitical risk, US mid-terms, Binance pulling out of FTX deal et al markets have had their eye on today's key US CPI data for a while and that day has now arrived. The Greenback has been on hot coals all week with bursts of USD supply being matched by and large now with reverse moves. Great two-way business but moves that have left traders clutching at straws on a few occasions.

The wobbly risk tones have accelerated with oil and equities both in solid retreat with gold also capping. Cryptos continue to slide which seems to be correlating with reduced risk appetite again generally. Talk of Russia retreating but equally plenty of discussion as to their real intentions. A few CB speakers on the slate again today but it's the CPI data that is capturing the main attention with forecasts of 0.6% mom with core expected around 0.5%.

As always, remember that conjecture and second-guessing should stand to one side on data and CB releases. The important thing is to identify your preferred risk/reward entry/exit levels prior.

GBPUSD: Soggy tones overall in the past 24 hours as I highlighted yesterday but helped on occasion by bursts of USD supply. A solid hold of 1.1330 but equally now capping above 1.1400 with 1.1425-30 area pivotal again. EURGBP: Underpinned at 0.8750 this time but failing at 0.8825 and in retreat again as I type as the jury remains out. I expect the two-way business to continue. Some option interest in play too. GBPJPY: Capping at 168.30-50 again and falling to test 166.00 amid the softer risk tones again.

EURUSD: A solid cap into 1.0100 amid the return of some USD demand and EUR crosses capping too and now 0.9975 as I type. Should still see some good two-way business amid the variable USD tones. Cross flows, risk, Ukraine all in the frame. Large option interest today along with US CPI to keep in mind. USDJPY: Underpinned round 145.25 with the return of the USD demand but capping at 146.80 again amid softer risk JPY demand too. Intervention threat still and I expect rally sellers to prevail for the time being and remains my preferred side. EURJPY: Support at 146.00 now broken amid the softer risk tones after sellers prevailing again around 146.75-80. USDCHF: Making its mind up atm with decent dip demand into 0.9800 tempered by EURCHF retreating amid the softer risk. EURCHF: Capping into 0.9900 this time and falling to 0.9845 as softer-risk CHF buyers prevail but SNB support not going to be far away.

AUDUSD: Forming a base around 0.6475-80 00 after the extended retreat on firmer USD and AUDJPY supply. NZDUSD also retreating amid the firmer USD tones and softer risk with support at 0.5850 now being tested again.USDCAD: A solid rally amid the firmer USD/softer oil double whammy and now testing 1.3550 again after holding 1.3450.

Let's continue to be careful out there.

Interbank rates: 08.40 GMT

GBPUSD 1.1396

EURUSD 0.9997

EURGBP 0.8771

GBPEUR 1.1400

GBPJPY 166.62

GBPCAD 1.5420

GBPCHF 1.1234

GBPZAR 20.2420

GBPHKD 8.8572

USDJPY 146.23

EURJPY 146.16

EURCHF 0.9850

EURHKD 7.7695

AUDUSD 0.6410

NZDUSD 0.5862

USDCAD 1.3522

USDCHF 0.9856

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