Tuesday 8 November 2022
Further USD supply after my update yesterday albeit with some two-way business at times but one further push lower in NY met with some dip/technical demand which we're still seeing this morning as I type.
Oil is $3 down from its highs with equities also capping but seemingly underpinned as market focus remains on US CPI data on Thursday with Gold finding its own cap around $1680 .Geopolitical risk still very much in the mix too along with the US mid-term elections today and continued conjecture over China's COVID measures compounded by the highest case count for some time.
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 the key 1.1425-30 area that I highlighted yesterday on the order board launched a rally to test the 76.4% retracement tech resistance at 1.1528. I remain a rally seller overall but some caution required amid these notable spurts of USD supply.
EURGBP: Underpinned at 0.8680-00 again after a decent retreat yesterday from 0.8780 as GBPUSD rally outstripped EURUSD. I expect the two-way business to continue.GBPJPY: A solid rally yesterday but capping at 169.00 and now testing 167.75 amid the core pair rally-sells and softer risk tones.
EURUSD: Breaking back down through parity after a decent cap at the 1.0025-30 tech/offers area. Should still see some good two-way business amid the variable USD tones and I remain a rally seller as my preferred side but caution required. Cross flows, risk, Ukraine all in the frame.USDJPY: Capping at 147.00 this time after holding of 146.00 but heading back down there again now amid some USD supply and 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: Supported this time at 146.00 then 146.00 and a solid rally to 147.00 but sellers prevailing again.USDCHF: Solid USD supply again sent it lower through 0.9930 but this time holding 0.9870 a few times. Some solid EURCHF dip demand into 0.9860-80 still and SNB never far away also both in the mix to lend support. EURCHF: Capping around 0.9920 again as USDCHF sellers prevail once more but SNB still be keeping an eye.
AUDUSD: Forming a base around 0.6450 amid the renewed USD supply yesterday and where we very large option interest again today. NZDUSD also rallying yesterday amid the softer USD but failing at 0.5950 with support now at 0.5900. USDCAD: tightly bound amid the variable USD and oil price action. Now testing 1.3500 again after holding 1.3460. Expect two-way business overall still.
Have a good day everyone.
Interbank rates: 08.48 GMT