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  • Writer's pictureMike Paterson

Some USD demand notable again

Thursday 5 January 2023

Good two-way business overall still as markets make their minds up in the first week of 2023 trading but we're seeing a little USD demand return in the wake of the US Fed FOMC minutes presenting hawkish tones by saying they think markets have been too dovish in their second-guessing. Not a great surprise and did little at the time of release but a nod to remain cautious on any pivot.

Equity and oil prices are softer but Gold is looking underpinned still. China stocks saw the biggest inflows since mid-November and CNH supported. US NFP data tomorrow casting a shadow overall too.

Remember, focus on the price action and let the algos do the heavy lifting/dropping. The important thing is to identify your preferred risk/reward entry/exit levels.

GBPUSD: Good two-way business with a failure between the good 1.12080-00 offers/resistance that I highlighted yesterday now resulting in a test of 1.2000 amid the USD demand. Some options interest there today too. EURGBP: Holding 0.8800 then 0.8820 but capping above 0.8840 so far this time. Ranging still as core pairs both retreat but remains underpinned. GBPJPY: 159.00 now proving a decent support area after failing around 160.00 in yesterday's rally as USDJPY bounced strongly.

EURUSD: The 1.0580 support line held well yesterday and again this morning as the pair fails into 1.0640 which becomes pivotal again. Rinse n repeat still while we continue to range.USDJPY: Holding 130.00 then 131.00, then 131.50 as we saw a strong rally yesterday before failing into 133.00. I prefer the rally-sell side still overall. EURJPY: USDJPY rally outstripping EURUSD support and we've been up to test 141.00 after a good hold of 138.50, then 140.00. USDCHF: Still holding 0.9250-60 amid the firmer USD tones but failing above 0.9300 as CHF demand prevails overall with EURCHF also in retreat. EURCHF: Still clinging onto 0.9830-40 in the retreat after failure at 0.9870 this time as core pairs both retreat amid the current uncertainty and CHF demand. Good two-way pips still.

AUDUSD: Good support around the 0.6800 area now after failing around 0.6885 in yesterday's extended/overcooked rally. Keep an eye on AUD crosses too. NZDUSD capping into 0.6350 again then 0.6320 but holding the old 0.6260 support so far.

USDCAD: Holding 1.3470 in the retreat from 1.3550 after triggering stops through 1.3520 but fall tempered by softer oil/firmer USD tones. Expect more two-way business overall.

Let's continue to be careful out there.

Interbank rates: 08.50 GMT

GBPUSD 1.2012

EURUSD 1.0614

EURGBP 0.8835

GBPEUR 1.1315

GBPJPY 159.35

GBPCAD 1.6240

GBPCHF 1.1145

GBPZAR 20.4087

GBPHKD 9.3714

USDJPY 132.07

USDCAD 1.3515

USDCHF 0.9277

EURJPY 140.81

EURCHF 0.9845

EURHKD 8.2822

AUDUSD 0.6816

NZDUSD 0.6278

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