Thoughts on KES volatility and a potential breach of 123

Been watching the $KES for a while now, and the recent action around 122.55 has my antenna twitching. We've seen it test these levels multiple times today, with the intraday high nudging 122.55. It feels like there's a lot of underlying pressure building, whether it's demand for dollars for imports or some institutional flow. The Central Bank has been fairly hands-off lately, or at least not aggressively intervening to strengthen the shilling, which tells me they might be comfortable with a bit more depreciation, or at least don't see it as critical to defend 122.50 with conviction.

My gut feeling, and it's just that – a gut feeling backed by observing previous patterns of consolidation followed by a sharp move, is that we're looking at a decent probability of breaking through 123 within the next 48 hours. I'd put the odds around 60% that we see 123 hit before the end of the week, maybe even seeing a brief spike towards 123.20. Beyond that, it could get interesting. If it does clear 123 with any sort of conviction, then the next psychological level is likely 125, but that's a story for another day. Of course, the market loves to humble a forecast, so don't be surprised if it decides to retrace to 122.00 just to spite me.