Markets tread carefully into another week

Monday 17 June 2024

Friday was all about risk appetite, or rather the lack of it, with European political concerns back to the fore and giving the Euro another shove lower. JPY demand also notable amid the wobbly sentiment and further BOJ fallout. We saw some reversal into the close and everything a little steadier this morning so far but all still very fragile.

Coming up this week we have the latest policy/interest rate decisions from the RBA tomorrow (Tuesday) then SNB and BOE on Thursday. Data wise today brings US NY Empire State Manufacturing Index, tomorrow US Retail Sales and Industrial Production. Wednesday focus will be on UK CPI/RPI/PPI.

While the CB second-guessing continues remember as always to identify your preferred risk reward levels and let the algos do their thing along with the natural and speculative flows especially in days like today with thin liquidity. Don't get greedy or over-analyse.

Equities still seeing two-way trading amid the CB/political conjecture with profit-takers still lurking as we now retrace Friday's US losses and a partial recovery in EU markets. WTI seeing more two-way business as well between $77.60-$78.80. Gold still finding a base at $2300 but failing at $2335 on Friday's risk-off rally but now in retreat as some stability returns. Dip demand should remain but profit-takers still poised.

GBPUSD: Support coming in at 1.2660 on Friday and again this morning after failing around 1.2750-60 then 1.2700 with EURGBP and GBPJPY flows notably in play too apart from some general USD demand. EURGBP: Dipping into 0.8400 on Friday amid the EU concerns but a strong rally since as concerns abate for the moment at least. Now up through 0.8450 where we also have decent option interest today. EU politics still casting a shadow and BOE on Thursday. GBPJPY: Holding 199.00 amid slightly firmer risk sentiment but capping at 200.00 so far.

EURUSD: Capping at 1.0730 on Friday and 1.0710 this morning after a hold of 1.0665 in the extended retreat. USDJPY: Two-way business still between 156.80-158.00 post-BOJ as might be expected in the current uncertainty amid both USD and risk volatility.

Traders - For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email mike@mspfx.co.uk