Ranging still

Mike Paterson
Feb 16, 2024
2 min read

Friday 16 February 2024

USD supply featuring again in the wake of some weaker than expected US data yesterday but we're still ranging overall as the Greenbback/Fed jury remains out. This morning's UK Retail Sales came in better than expected which has take some sting out of yesterday's weak/historic GBP data but there's still reason for concern. Politically the Tory government got trounced again as expected in two by-elections.

Today's data focus now turns to US PPI and Housing Starts and there's a few CB speakers on the slate too. The Ukraine/Russia war and Middle East Israel/Hamas/Houthi/Hezbollah/Red Sea tensions are all still casting their own shadow. 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 remain underpinned overall still and on the rise once again as European trading gets underway. WTI has risen again to test $78.00 after holding $75.50 with dip demand still on supply concerns. Gold has found some dip demand again on fragile risk tones amid the USD supply but capping at $2006 so far after holding $1995-00.

HOUSEKEEPING NOTE: I'm away on Monday so there'll be no update. Normal service resumed Tuesday. Have a good weekend everyone.

GBPUSD: Support at 1.2540 still but capping into 1.2610 this time in the extended rally amid USD supply. I remain poised for further sells when momentum fades as we continue to range. EURGBP: Basing yet again at 0.8535 this morning post UK data after capping at 0.8570 as the BOE/ECB debates continues. GBPJPY: Holding 188.00 yesterday but capping into 189.25-35 again as sellers remain poised on core pairs and fragile risk.

EURUSD: Holding 1.0730 amid the USD supply but capping at 1.0785. I remain a rally seller. USDJPY: Holding 149.50 yesterday but capping at 150.30-40 still. I remain a rally seller as preferred side overall given that the BOJ still don't want this racing away too far but dip demand still notable for the moment as I've been warning.

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: 08.52 GMT

GBPUSD 1.2581

EURUSD 1.0767

EURGBP 0.8558

GBPEUR 1.1682

USDJPY 150.25

GBPJPY 189.00

GBPCAD 1.6945

GBPCHF 1.1091

GBPZAR 23.7878

GBPHKD 9.7998