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  • Writer's pictureMike Paterson

Ukraine uncertainty continues

Thursday 17 February 2022

Reports of shelling and gunfire in Eastern Ukraine this morning adding to the uncertain tones and risk-off plays prevailing but by no means one-way traffic. Equity markets are softer while oil is off its lows and remain underpinned overall still as I warned yesterday. Gold higher again amid the uncertainty and now posting 1890 after a good hold around 1845 yesterday that I highlighted here.

I repeat that it's not for us to determine what the outcome over Ukraine will be but the guessing game will continue and keep the headline-algos jumping on hot coals. Meanwhile conjecture over Central Bank rate hikes continues to add more uncertainty into the mix.

As ever, a case of not over-analysing or second-guessing but keeping your focus on price action in core and cross-pairs and identify ranges and what levels present value for money. Patience invariably a virtue but don't confuse patience with being stubborn either in entry or exit.

GBPUSD: A good hold of 1.3550 in latest retreat and some pips banked but sellers still poised. Mixed risk tones helping to contain along with large option interest today and tomorrow.EURGBP: Duly finding support around 0.8350 still but finding another rally above 0.8380 a step too far with large option interest at 0.8390 and mixed risk helping to contain as the uncertainty remains. GBPJPY: Finding support at 156.00 in the latest retreat after a risk-off failure at 157.00. Caution still required atm amid risk-off/on uncertainty.

EURUSD: A good hold of 1.1320 then 1.1340 this time after failure around 1.1380.Large option interest tomorrow in play too. USDJPY: Support around 115.50 now history amid risk-off JPY supply and some softer USD tones after failing at 115.60. Now testing 115.00. EURJPY: Capped at 131.50 this time around and now testing 130.40-50 support as JPY supply once again outstrips any EUR selling. USDCHF: 0.9200 support expected after the fall through 0.9220-30 amid EURCHF falling back to 1.0450. SNB ever vigilant but rally sellers poised too still. EURCHF: Testing 1.0450 support after breaking down through, and then capping, at 1.0500 amid some strong CHF demand.

AUDUSD: Some risk-off AUDJPY and AUDCHF supply now helping to cap at 0.7220 as the rollercoaster risk ride continues.Support so far at 0.7180 helped by softer USD tones. USDCAD: Capping at 1.2760 and now 1.2740 on the firmer/underpinned oil price and softer USD tones but some CADJPY supply. Option interest tomorrow casts a shadow too.

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

Interbank rates: 08.34 GMT

GBPUSD 1.3578

EURUSD 1.1365

EURGBP 0.8362

GBPEUR 1.1957

GBPJPY 156.40

GBPCAD 1.7272

GBPCHF 1.2533

GBPZAR 20.3800

GBPHKD 10.5944

USDJPY 115.09

EURJPY 130.80

EURCHF 1.0475

EURHKD 8.8604

AUDUSD 0.7195

USDCAD 1.2708

USDCHF 0.9214

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