Thursday 19 October 2023
Risk sentiment still understandably fragile amid the Middle East tensions and the Greenback remains underpinned overall as US bond yields continue to rise with 10-year above 4.9% not seen since 2007 and pushing ever closer to 5%. USDJPY still banging against 150.00 prompting MOF/BOJ intervention talk but JPY and CHF demand still notable and helping to cap core pairs too.
Aussie jobs/wages data was a little soggy helping to push AUD down too. Yesterday's Beige Book release showed an undertandably mixed bag but Fed's Powell speaking today at 16.00 GMT where markets are expecting him to veer towards the hawkish yet cautious side. Plenty of Fed speakers this week advocating a pause in rate hikes in two weeks time with bond markets continuing to help the general tightening conditions too.
Equities are in retreat again and still softer in Asia/early Europe amid the softer risk tones and firmer bond yields. WTI capping at $88.30 in yesterday's extended rally but now down to $86.30 with the jury still out amid the uncertain ME and global economic picture too. Gold has found support around $1935 this time amid the fragile risk tones but capping $1955 with natural sellers ever poised still. Geopolitical concerns still very much a threat to market stability with focus on increasing Ukraine/Russia tension and now with the Middle East sadly to the fore.
GBPUSD: Capping around 1.2200-10 again yesterday after holding 1.2160 in a tight range contained by large option interest I warned about with more today at 1.2140 and 1.2160. Now a retreat to 1.2110 amid the USD demand and GBPJPY/GBPCHF supply. I remain poised for further re-sells when momentum fades. EURGBP: Still trading tightly with another hold of 0.8660 and now testing 0.8695 as GBPUSD retreat outstrips EURUSD.More two-way business expected as core pairs fluctuate.
GBPJPY: Holding 181.40 as I type after yet another cap at 182.80 with rally sellers ever poised still amid the fragile risk.
EURUSD: 1.0520-30 support this time after capping at 1.0560 amid the USD demand and EURJPY/EURCHF supply. I remain a rally seller overall. USDJPY: 149.60 holding this time but rallies capping into 150.00 with MOF intervention fears still there and risk-off JPY demand. I remain a rally seller as preferred side overall at these elevated levels but with patience a virtue as ever.
More detailed analysis across a variety of pairs and 1-2-1 mentoring sessions for traders from mike@mspfx.co.uk
Comments