USD demand notable again

Wednesday 19 April 2023

Markets still second-guesing not only the FOMC in next month's policy decision but all CBs and this morning's UK inflation data has reminded traders that inflation is not rushing back down any time soon. We've see some GBP demand as markets price in BOE 5% interest rate by November starting with another 25bps next month but also USD demand notable again too so capping GBPUSD rally as I type.

Equities are currently in retreat again but remain underpinned overall while WTI has capped into the pivotal $81.50 again and now testng $79.50 as I type as the jury remains out. Gold has had another dip into $1980 too after capping around $2010 amid the globl uncertainties both financially and otherwise. Ukraine/Russia war continues to be the main geo-political elephant in the room with ongoing US/China/Taiwan tensions in the mix too and now ongoing Middle East tensions. Oh, and North Korea casting a shadow too.

Remember, focus on the price action and let the algos do the heavy lifting/dropping amid all the second-guessing. The important thing is to identify your preferred risk/reward entry/exit levels prior and be poised to execute.

GBPUSD: Capping into 1.2475 in this morning's rally post-CPI data and some re-sells placed yesterday after yesterday's hold of 1.2400. I remain a rally-seller on this pair overall while we continue to range. Keeping some re-sells as USDJPY hedge too. UK economy continues to worry me. Options in play today. EURGBP: Support coming in now at 0.8790 after capping at 0.8840 and dopping post-CPI. Sellers poised around old support of 0.8830-35 again. Expect more two-way business still.

GBPJPY: Holding 166.50 this time and spike into 168.00 on the GBP spike and USDJPY rally but sellers poised still as the risk jury remains out.

EURUSD: Another failure around 1.0980 amid the USD demand and some re-sells duly placed and I remain a rally seller as my preferred side overall but equally a case for buying dips still as we continue to range. Decent option interest waiting again above 1.1000. USDJPY: Now up through 134.75 where we had decent technical resitance amid the USD demand this morning after a good hold of 133.80-00 with pips duly banked in the retreat. I continue to favour rally sells overall with hedges elsewhere as I've mentioned previously.

More detailed analysis across a variety of pairs from mike@mspfx.co.uk