Wednesday 17 July 2024
US Retail Sales came in above expectations yesterday helping initially to underpin the Greenback but we've seen some USD supply return since with key levels remaining intact and USDJPY falling back through 157.50 as equities retreat adding to softer risk tones. JPY demand now notable again amid the risk sentiment wobble in these ever-fickle times and helping to cap core pairs but USD supply still prevailing as I type.
This morning saw UK CPI proving stubborn and giving the BOE plenty to think about ahead of the August meeting which has seen the odds of a rate cut trimmed in the aftermath. The Pound has found some general support understandably.
Final EZ CPI reading, US Housing Starts/Building Permits, US Industrial Production and Capacity Utilization all on the data front today. US Fed heads Waller, Barkin and Schmid due on the rostrum. The latest ECB rate decision/statement tomorrow casting its own shadow is but no cuts expected before August/September.
US equity markets have had another wobble with profit-takers prevailing and we have seen another retreat in European markets this morning. WTI fell again but held $79.50-60 and now testing $80.20-30 in the bounce. Ever fickle for the moment and expected to range still. Gold has posted new record highs of $2482 after holding $2450 amid the softer risk tones.
GBPUSD: Support coming in at 1.2950-60 yet again amid the USD supply returning and now up through 1.3000 as I type and taking out reported barrier option interest. GBPJPY supply helping to temper the rally. EURGBP: Falling from 0.8410 amid GBP buying this morning post-CPI data and now testing decent support at 0.8380-85 as I type. ECB/BOE rate cut conjecture also in play still. ECB in focus tomorrow. GBPJPY: Another rapid retreat this morning from 205.60 amid the risk off JPY demand and USDJPY tumble now into 157.00 as I type. Testing 204.00-10 again now.
EURUSD: Holding 1.0880 again helped by the USD supply but capping at 1.0912 so far amid the EURGBP and EURJPY selling. USDJPY: A rapid retreat this morning from 158.50 amid the USD supply/JPY risk-off demand double whammy to break down through 157.00 as stops get triggered. MOF/BOJ intervention fears remain but traders doing the job for them atm.
Traders - For more detailed analysis across a larger number of FX pairs including market order flows and options expiries email mike@mspfx.co.uk
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