Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.103 | EURUSD 1.1898 | AUDUSD 0.7602 | NZDUSD 0.69076 | USDCAD 1.27688 | USDCHF 0.98173 | GBPUSD 1.33187 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.19088 | 1.18964

USDJPY                 111.328 | 110.932

GBPUSD               1.33388 | 1.33117

USDCHF               0.98244 | 0.98036

AUDUSD              0.76136 | 0.76011

USDCAD               1.27695 | 1.2755

NZDUSD               0.69427 | 0.69117

EURCHF                1.16887 | 1.16699

EURGBP               0.89402 | 0.89264

EURJPY                 132.473 | 132.102

For today

• EUR: A quiet day with the market meandering around the 1.1900 levels unable to push the 1.1895 level and struggling on any move towards the 1.1910 areas through to the grey hours, Topside offers light through to the 1.1940-60 areas with stronger offers then building on any attempt towards the 1.2000 areas, a push through the 1.2020 areas will likely see weak stops appearing in the market and a run to the 1.2050 levels where offers start to appear with the market strengthening as the market moves through to the 1.2060 areas with limited potential for stops and 1.2080-1.2120 likely to see option barriers appearing, a push through that area though is likely to see the market extending its gains with very little but sentimental levels protecting another extension into the 1.23 handle, downside bids light through the 1.1900 areas with some light stops likely on a break back below the 1.1880 level however, stronger bids are likely to appear on a move towards the 1.1850 level with congestion likely through to 1.1800 beyond that level.
• GBP: Opening around the 1.3320 areas the early movement was a steady rise towards the 1.3330 level before drifting back off in the Tokyo session, the market again started to test higher into mid-morning in Tokyo pushing through the highs and testing towards the 1.3340 level into the grey hours, the push into the grey hours saw a quick spike higher towards the 1.3360 area before dropping back to hold around the 1.3340 area. Topside offers into the 1.3380-1.3400 are likely to be fairly strong however, a push through the 1.3440 level opens the topside up to stronger gains and the congestion around the 1.3500 areas likely to be key to another attempt to break the 1.3600 areas with conviction and the pre-Brexit vote ranges appear in the crosshairs. Downside sees some bids into the 1.3300 and through to the 1.3280 areas, with congestion likely to continue into the stronger 1.3250 levels, stops are likely just behind the level however, the sentimental values are congested and difficult to see being tested beyond the 1.3200 without some dire comment.
• JPY: The USDJPY moved through to the Tokyo session with little movement and early buyers took the market to the 111.20 level before fixing supply saw the market dropping back through to below the 111.00 level to set the lows around the 110.95 area, the market recovered once the supply had disappeared and the USDJPY rose quickly back to the opening 111.10 areas and continued through to test the 111.30 level before drifting through to the grey hours pulling back to hold the 111.20 areas. Topside offers light through to the 111.70 level with the offers extending through to the 112.00 areas, light congestion through the level will likely see weak stops behind the 112.20 areas and the market quickly opening to test the 112.50 area with stronger offers behind the 112.80 level. Downside bids light through the 111.00 areas with the strength increasing through to the stronger 110.50 level with potential strong stops beyond and the 110.00 very vulnerable to a strong test and an opening to the 109.50 area.
• AUD: The Oz was extremely quiet overall with the market trading around the 0.7605 areas for much of the session, as the market moved towards the Tokyo lunch hour the market started to move off the opening areas moving into the grey hours testing the 0.7615 area in a limited move. Topside offers light through to the 0.7640 levels where the market again sees offers starting to build with possible stops through the 0.7660 areas and congestion from that point on to the 77 cent level with the market likely to be very congested through to the 0.7730 areas and while there maybe a few stops in the area that congestion is likely to continue through to the stronger 0.7775-0.7800 levels. Downside bids light back through the 76 cent level with some stronger bids likely to appear around the 0.7580 areas, a push beyond the level will possibly see weak stops however, the market is likely to remain congested on a test into the 0.7540 areas and only then does the market open to possibly a strong test of the 75 cent level with further congestion through that area.

Overnight News                                                                  

USD:

FED’s Kaplan sees financial imbalances

Powell: FED expects interest rates to rise somewhat further

Powell defends bank regulation, sees higher US interest rates

FED’s Dudley says not concerned US inflation is a little low

ZAR:

Moody’s leaves investment grade intact for now

Zuma vows to cut spending, raise taxes to spur revenue

EUR/TRY:

Turkey said to be removed from draft EU tax havens blacklist

JPY:

BoJ’s Kataoka calls for more easing, counters calls for exit

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

07:00     EUR        German Import Price Index M/M Oct C 0.40% | P 0.90%

09:00     EUR        Eurozone M3 Money Supply Y/Y Oct C 5.10% | P 5.10%

12:00     EUR        German GfK Consumer Confidence Dec C 10.7 | P 10.7

13:30     USD       Advance Goods Trade Balance Oct C -65.0B | P -64.1B

13:30     USD       Wholesale Inventories M/M Oct (P) C 0.40% | P 0.30%

13:30     CAD       Industrial Product Price M/M Oct P -0.30%

13:30     CAD       Raw Materials Price Index M/M Oct P -0.10%

14:00     USD       House Price Index M/M Sep C 0.50% | P 0.70%

14:00     USD       S&P/Case-Shiller Composite-20 Y/Y Sep C 6.00% | P 5.92%

15:00     USD       Consumer Confidence Index Nov C 124 | P 125.9

 

Harry Hindsight

• EUR: Opening around the 1.1925 levels the market slipped a little lower into the Tokyo session to test the 1.1910 areas before starting a slow rally back to the opening levels through into the grey hours, the move into the London session saw the market pushing through the early highs and quickly rising through the 1.1950 levels before coming to a quick stop above the 1.1955 level, dropping back just as quickly before starting a more steady rise through into the NYK session, a stronger more determined push again saw a similar rejection on the push to the 1.1960 levels however, the rejection this time was sharper and the market quickly dropped through the 1.1920 level and tested to the figure level trading through to the close around that areas.
• GBP: A quiet Asian session saw the market drifting from the wide opening 1.3320-40 areas dropping steadily through to the grey hours testing the 1.3310 level before London moved in to push quickly away from the lows and trading in the early morning London testing the 1.3350 levels holding through the NYK session with the market moving from the opening to quickly push through to the 1.3360 level and then slowly probing to the 1.3380 level before running into congestive offers which eventually saw the market drop quickly back testing back to the opening levels and slipping to the 1.3315 areas over the course of the remaining session running quietly to the close.
• JPY: The highs were made just after the opening with the market testing to the 111.70 levels before dropping back steadily into the early Tokyo session, and trading around the 111.40 through to the grey hours, the move into the London session saw the market test below the 111.20 areas and held through to the NYK session however, NYK were quick sellers and managed to chase the market to just below the 110.90 levels before finding stronger bids and holding and rising slowly through the balance of the session to push back to the 111.10.
• AUD: Early trading saw the Oz moving lower with AUDJPY playing a strong role in the call back to below the 76 cent testing the 0.7595 areas before rising back through to the just below the opening levels and into the London session, early traders started buying just before the opening and the Oz made steady headway through top the to the 0.7645 areas before slipping lower and then dropping quickly through the 0.7625 level to return to the 0.7605 level and hold into the close.

Yesterday’s premiership results

JPY         Corporate Service Price Y/Y Oct A 0.80% | C 0.90% | P 0.90%

USD       New Home Sales Oct A 685K | C 627K | P 667K | R 645K

               

Good Luck,

Andy

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