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Pausing for thought

Writer's picture: Mike PatersonMike Paterson

Thursday 18 January 2024


Or pausing for more second-guessing as the Greenback finds a little supply after another rally yesterday helped by stronger US Retail Sales data which in turn pushed bond yields higher. Currency pairs and markets in general still in second-guessing mode and ranging amid the fragile geopolitical backstory and Central Bank hot air but USDJPY climbed above 148.00 and testing 148.50 before retracing back below 148.00.


Meanwhile the Ukraine/Russia war and increasing Middle East Israel/Hamas back-story casts its own shadow over markets and still to reveal its full impact yet as I've been warning for a long time now. CB heads continue to speak from Davos and today brings US jobless claims and Philly Fed Mftg data.


Equities traded lower again in NY but still underpinned for the moment and nudging a little higher again as I type. WTI fell again to test $70.50 this time with sellers poised still despite Red Sea developments but back above $73.00 as I type.Gold falling again on the USD demand and seemingly and still ignoring the fragile risk tones but holding $2000 after capping at $2025-30.


GBPUSD: Capping at 1.2700-10 amid the general USD demand adfter holding 1.2640. Re-sells made around 1.2700 again. I remain poised for further sells when momentum fades but patience still required with some support still lurking from yesterday's CPI data. EURGBP: Capping at 0.8600 now on the general GBP demand post-UK CPI and down through 0.8570 in the latest retreat but holding 0.8565 so far as the CB jury remains out. GBPJPY: JPY supply prevailing still as USDJPY continues its march higher holding 187.00 to test 188.00-20 on the core pair dip demand. We can expect rally sellers to remain poised amid all the uncertainty in these ever fickle markets but coming second at the moment.


EURUSD: Support coming in at 1.0840-50 in yesterday's retreat amid the USD demand but capping 1.0900-10 this time as the jury stays out on risk and CB comments. I remain a rally seller. USDJPY: Finding support between 147.50-60 this time before and after capping at 148.50 yesterday. I remain a rally seller as preferred side overall but caution/patience still required for the moment. Underpinned still but the higher we go the more the MOF/BOJ will be interested.


For more detailed analysis across a larger number of FX pairs email mike@mspfx.co.uk

Interbank rates: 08.46 GMT

GBPUSD    1.2690

EURUSD    1.0880

EURGBP    0.8573

GBPEUR    1.1662

USDJPY    147.88

GBPJPY    187.66

GBPCAD    1.7118

GBPCHF    1.0961

GBPZAR    23.9970

GBPHKD    9.8772

USDCHF    0.8661

EURCHF    0.9423

EURHKD    8.4714

AUDUSD    0.6556

NZDUSD    0.6118

USDCAD    1.3500



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