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  • Writer's pictureMike Paterson

Markets still melting

Monday 20 March 2023

Yes folks, markets are once again realising that sticking plasters on gaping wounds may stem some bleeding but it's not making the patient recover. Yesterday's take over of Credit Suisse by UBS at a bargain price backed by the SNB critically undervaluing CS has only served to strike more fear into traders and investors alike understandably. Then last night the the Bank of Canada, Bank of England, Bank of Japan, European Central Bank, US Federal Reserve, and the Swiss National Bank

announced a coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements, changing the frequency from weekly to daily. JPY demand notable again amid the risk-off sentiment at the start of a very busy week with the US Fed announcing their latest decision on Wednesday then the SNB and BOE on Thursday.

Equities enjoyed a brief respite rally on the on the Asia opening but then the reality check kicked in and in rapid retreat again this morning before finding a biut of support as I type as the rollercoaster fragile risk ride continues amid the uncertainty. WTI has been down to $64.40 after failing to get back through $68.00 as the fragile risk tones remain but also turning a little higher as I type. Gold has rallied again and finally justified its recently underpinned tones to post $2010 after holding $19860 then $1980. Ukraine/Russia war continues to be the main geo-political elephant in the room with ongoing US/China tensions in the mix too. Today China's Xi is due to meet with Putin as the fragile global landscape looks ever more concerning.

GBPUSD: Holding 1.2120 then 1.2160 on Friday amid the USD supply but capping around 1.2220 since and re-sells duly placed again and some pips banked in the retreat to 1.2165 so far. I remain a rally seller still albeit continuing with some caution. EURGBP: A solid fall to 0.8730 this morning amid the EU banking sector fallout but finding some support as I type.Expect some more two-way trading as core pairs and risk both fluctuate. GBPJPY: Support line back in at 159.00 this time after the retreat from 161.50 with rally sellers poised as the uncertainty/fickle sentiment continues.

EURUSD: Capping at 1.0690 after a decent hold of 1.0630-50 and some e-sells duly placed. I remain a rally seller as my preferred side still but some caution required..USDJPY: A decent resistance line forming on Friday and early Asia at 132.50-60 and some re-sells duly placed per ongoing strategy. The subsequent risk-off retreat finally coming to a halt at 130.50 and somepips gratefully banked along the way.I continue to favour rally sells and being long JPY on the crosses too overall so I hope the steer continues to help.

More detailed analysis across many more pairs from

Interbank rates: 08.28 GMT

GBPUSD 1.2189

EURUSD 1.0644

EURGBP 0.8731

GBPEUR 1.1451

USDJPY 130.75

GBPJPY 159.32

GBPCAD 1.6730

GBPCHF 1.1324

GBPZAR 22.5440

GBPHKD 9.4961

EURCHF 0.9893

EURHKD 8.2935

AUDUSD 0.6683

NZDUSD 0.6242

USDCAD 1.3725

USDCHF 0.9295

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