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  • Writer's pictureMike Paterson

Risk appetite underpinned again

Monday 17 January 2022

Equity and commodity markets have found the usual dip buyers and that's brought with it some risk-on JPY supply with USDJPY leading the way back up to post highs of 114.55 before retreating. Mixed tones on the Greenback generally but commodity currencies finding a bit of support as another week gets underway.

US markets closed today for Martin Luther King Day and little by way of economic data but latest BOJ decision/rhetoric due tonight/tomorrow.

As always, don't over-analyze or second-guess but keep your focus on price action in core and cross-pairs and identify recent ranges to see whether we hold or break and what levels present value for money. Patience will invariably be a virtue but don't confuse patience with being stubborn.

GBPUSD: 1.3700 support broke on Friday and now becomes immediate resistance after a good hold of 1.3650.

EURGBP: Still ranging tightly with the strong 0.8330 support area underpinning again but equally still failing around 0.8360 and helping to underpin GBPUSD. Should continue to see good two-way buiness. GBPJPY: 156.00 support broke on Friday as USDJPY extended its retreat amid the risk-off tones buta good hold of 155.50 and now testing 156.50 as USDJPY rallied off its lows on Friday helped by firmer USD and some risk-on JPY supply.

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

EURUSD: 1.1400 support now after retreatijg from 1.1480-85 where we had that decent size option interest on Friday. USDJPY: A good hold of 113.50 and now back up to 114.50 on firmer USD and JPY selling.

EURJPY: 130.40 support broke on Friday amid the extended USDJPY fall but now 129.80 providing a line for the moment.Sellers lurking at 130.80-00 again. USDCHF: 0.9100 still providing some support with the SNB shadow ever present but failing at 0.9160 as EURCHF struggles to rally too far for the moment. EURCHF: SNB ever vigilant but failing above 1.0450 and now testing 1.0420.

AUDUSD: Solid retreat on Friday but holding 0.7200 for the moment as commodity currencies generally feel some love this morning. USDCAD: 1.2470 support on Friday before a test of 1.2570 amid the softer oil/firmer USD flows once those 1.2525 options were out of the way but the reverse true this morning as commodity currency support sees a cap at 1.2550 and retreat toward 1.2500..

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

Interbank rates: 08.15 GMT

GBPUSD 1.3681

EURUSD 1.1425

EURGBP 0.8351

GBPEUR 1.1974

GBPJPY 156.43

GBPCAD 1.7130

GBPCHF 1.2484

GBPZAR 21.0600

GBPHKD 10.6575

USDJPY 114.34

EURJPY 130.64

EURCHF 1.0432

EURHKD 8.9003

AUDUSD 0.7216

USDCAD 1.2522

USDCHF 0.9130

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