Tuesday 27 February 2024
Still very quiet overall but we've seen US bond yields, equities and USD a little weaker with month-end flows also in play. Rebalancing signals are showing moderate USD selling across the board, with the strongest sell signal in the case of USDCAD and USDAUD. Also some signals pointing to EUR selling.
Japanese inflation data has brought about some JPY demand with USDJPY falling back through 150.30-50 support and early European trading is seeing a bit more USD supply amid softer bond yields too. US Durable Goods data today and US Core PCE in focus on Thursday with RBNZ rate decision out tomorrow (Wednesday). The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Hezbollah/Red Sea tensions are all still casting their own shadow so while all the uncertainty remains, both economical and geopolitical, remember to identify your preferred risk reward levels and let the algos do their thing along with the natural and speculative flows. Don't get greedy or over-analyse.
Equities finding dip support still after yesterday's retreat in NY trading but off their lows as European trading gets underway. WTI capping at $78.00 again on fresh Gaza ceasefire hopes but supply concerns still helping to underpin overall. Gold capping into $2040 again but has found some dip demand around $2030 now as we continue to range tightly.
GBPUSD: Support at 1.2670 amid the USD supply but a failure above 1.2700 yet again helped by offers building up there and GBPJPY supply. I remain poised for further sells when momentum fades as we continue to range overall. EURGBP: Basing around 0.8550 now amid some renewed EUR demand but capping around 0.8560 as the BOE/ECB debates continues. GBPJPY: Testing 190.50 as I type after capping into 191.00 post Japanese inflation as sellers remain poised on core pair supply but still underpinned overall.
EURUSD: Holding 1.0840 this time amid the USD supply but rallies limited still with 1.0865 capping so far and I remain a rally seller. USDJPY: Capping around 150.80 still and now down through 150.30 support line to tet 150.10. Jobbing pips banked and I remain a rally seller as preferred side overall given that the BOJ still don't want this racing away too far.
Traders - For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email mike@mspfx.co.uk
Interbank rates: 08.38 GMT
GBPUSD 1.2693
EURUSD 1.0861
EURGBP 0.8555
GBPEUR 1.1686
USDJPY 150.15
GBPJPY 190.58
GBPCAD 1.7106
GBPCHF 1.1160
GBPZAR 24.3187
GBPHKD 9.8772
USDCHF 0.8789
EURCHF 0.9546
EURHKD 8.4497
AUDUSD 0.6554
NZDUSD 0.6171
USDCAD 1.3494
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