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US TSYS SUMMARY

Substantial Further Progress Not Yet Reached

USDCAD TECHS

Runs Counter to Trend

AUDUSD TECHS

Fed Bounce Stops Short

EURJPY TECHS

Bearish Trend Conditions

USDJPY TECHS

Bearish Threat

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GBP/USD prints 15 pips or so lower on the day into London hours, dealing at $1.3660 at typing, with the USD sitting atop the G10 FX table towards the end of a risk-negative Asia-Pac session.

  • A reminder that the UK fell afoul of its higher beta to the delta COVID strain on Monday, struggling on worry surrounding the spread of the mutation (albeit with hospitalisations and deaths running at much more subdued levels than we have seen previously, aided by the country's vaccination rate), taking the gloss off of "freedom day." Cable tried to find a base in late London trade as the DXY moved away from fresh multi-month highs, but slipped to worst levels of the session ahead of the NY close before consolidating in Asia-Pac hours.
  • We also saw some counter to the recent hawkish utterances from BoE policymakers Saunders & Ramsden, with Haskel and incoming MPC member Mann underscoring their views surrounding the transitory nature of the current inflationary impulse.
  • From a technical perspective, Monday saw the 200-DMA and key support at $1.3669 give way, with bears now looking to the 23.6% retracement of the Mar '20 to Jul '21 rally as the next level of notable support ($1.3579). Bulls need to retake yesterday's high ($1.3790) to start turning the tide in their favour.
  • There is nothing of note on the FX options expiry front over the coming days (at least not at present).
  • Today's UK docket is bare, leaving the cross at the whim of broader headline & macro flow.