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  • Writer's pictureMike Paterson

More of the same

Tuesday 14 December 2021

No apologoies for the repetition in this opening paragraph. It is what it is out there right now as second-guessing on Central Banks continues to cast a shadow with the Fed meeting tomorrow then SNB, ECB and BOE on Thursday. Throw in OPEC oil talks with COVID/Omicron unknowns continue to lurk and the uncertainty/tight ranging is understandable.

Range trading still prevailing and good two-way business again amid the uncertainty and hence variable risk and USD tones but underpinned in the dips overall, albeit with the jury stll well and truly out. Oil has had a wobble again but off its lows while Gold side-winds still.

GBPUSD: Based at 1.3190 this morning after failing at 1.3260 and pips gratefully banked along the way again. Rallying now totest 1.3220. Jobs/wages data ok earlier but no great shocks. GBPUSD rally sellers, including me, ever poised while keeping one eye at least on the EURGBP and GBPJPY cross flows. Large option interest again at 1.3200 should help to contain. EURGBP: Held 0.8500 and then 0.8530 after failing once again at 0.8550 on the initial rally. EUR supply being oustripped by GBP weakness this time. Expect more 2-way business amid the general uncertainty.

GBPJPY: 149.80-150.00 still providing the support after capping at 150.80 omn yesterday's firmer risk rally but sellers remain poised amid the variable risk tones and general GBP weakness. Should continue to see good two-way business as risk sentiment continues to be ever-fickle.

I remain a GBP rally seller across the pairs overall as my preferred trading side albeit still against the grain currently so being patient as ever. These markets are ever-fickle so good/tight position management essential.

EURUSD: Previous support at 1.1260-70 still holding after failing above 1.1300 this time as we continue to range but looking soft still. Pips banked in the retreat. I prefer to sell rallies overall still but keeping an eye on cross flow impact and risk sentiment as always.USDJPY: Capping at 113.75-80 again after holding 113.40-50 this time as the range narrows amid variable risk and USD tones. EURJPY: 128.00 support still and now looking at 128.40-50 again as a few Euro buyers return amid the flaky risk sentiment.USDCHF: Support at 0.9200 again now with the SNB ever vigilant and helped by some general USD dip demand and EURCHF back above 1.0400 after a quick dip to 1.0390. CHF demand notable overall again. EURCHF: Holding 1.0400-10 again with SNB shadow lurking still after failing at 1.0435 as EUR supply returns.

AUDUSD: A break of 0.7100 support in thin liquidity Asian trading after weak business data but back above now after failing into 0.7140-50 this time amid the generally firmer USD tones and commodity currency supply.USDCAD: Further CAD weakening during the Asian session on softer oil tones trading above 1.2820 before capping. The BoC yesterday renewed its 2% inflation target yesterday but set a 1%-3% control band. Canada's government announced that its primary objective is to maintain low, stable inflation over time and that monetary policy should support full employment, which was added to the BoC's mandate last week. A good hold of 1.2780-00 for the moment.

Let's continue to be careful out there in all things. Staying safe must be our main priority still.

Interbank rates: 08.50 GMT

GBPUSD 1.3214

EURUSD 1.1286

EURGBP 0.8540

GBPEUR 1.1704

GBPJPY 150.25

GBPCAD 1.6915

GBPCHF 1.2167

GBPZAR 21.2667

GBPHKD 10.2945

USDJPY 113.70

EURJPY 128.35

EURCHF 1.0405

EURHKD 8.7957

AUDUSD 0.7128

USDCAD 1.2808

USDCHF 0.9219

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