Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.562 | EURUSD 1.23772 | AUDUSD 0.7906 | NZDUSD 0.73124 | USDCAD 1.24939 | USDCHF 0.93606 | GBPUSD 1.3951 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.23933 | 1.23702

USDJPY                 109.725 | 109.148

GBPUSD               1.39707 | 1.39435

USDCHF               0.93694 | 0.93449

AUDUSD              0.79085 | 0.7875

USDCAD               1.25160 | 1.24954

NZDUSD               0.73475 | 0.73045

EURCHF                1.15951 | 1.15794

EURGBP               0.88765 | 0.88673

EURJPY                 135.866 | 135.206

For today

• EUR: A quiet steady day with the Euro rising only marginally through the session pushing from the low 1.2370 opening and testing through the 1.2380 level but unable to push to far through, light offers through the 1.2400 levels with weak stops likely on a move through the 1.2420 areas however, stronger congestion from the 1.2440-60 levels will likely slow the market with stronger offers through the 1.2480-1.2520 level, and possibly stronger offers beyond, stops more likely to be on a break through the 1.2540 areas. Downside bids light through to the 1.2340-20 areas with weak stops likely on a dip through the 1.2280 level and opening up a quick test through to the 1.2250 areas and congestive bids continue from there.
• GBP: Cable fared no better with the market opening around the 1.3950 level and slowly rising through to the 1.3970 levels and generally holding in the 1.3960-70 levels through to the grey hours, Topside offers light through the 1.4000 level with possible weak stops on a test through the 1.4020 level and limited congestion through to the 1.4100 level with better offers on a push to the 1.4150 level. Downside bids into the light through to the 1.3840 level and downside support line in that area protecting a weak downside with a move through the 1.3800 level likely to open a quick return to the 1.3500-1.3600 levels.
• JPY: The market made early gains to the 109.70 areas before the full move into the Tokyo session saw the market drop quickly to the 109.35 levels to hold quietly through into late morning in Tokyo and a steady drift from that point through to the 109.20 levels, Topside offers light through to the 110.00 areas with some offers likely to continue through the level a break of the 110.50 areas will likely see weak stops appearing and the market open to a quick test to the 111.00 where stronger offers are likely to appear. Downside bids light through to the 108.50 area with stronger bids then increasing on any test towards the 108.00 levels with stops likely to be stronger through the 107.80 level and open a deeper test to the 107.20 levels with better bids likely.
• AUD: The move into the Tokyo session saw the Oz slip a little to back below the 0.7900 areas before holding through into Tokyo around the 0.7890 level and basing there for a few hours before again testing to the 0.7910 areas in mid-session, the rally was short lived and the drop this time saw the market extend to the 0.7880 areas and then slowly push through the level to the 0.7865 areas into the grey hours on light trading, downside congestive bids increase on a move through the 0.7840 levels with the market likely to be slowed until the market breaks through the 0.7780 areas and the potential for  stronger sell off with weak sentimental bids into the 77 cent level and further stops on a push through the 0.7680 area, topside offers light through to the 80 cent levels with stronger offers mixed with the stops, a push through the 0.8040 level will see weak stops however stronger offer are suspected from there on and increasing into the 81 cent level.

 

Overnight News

EUR:

Merkel warns of painful compromises to reach coalition breakthrough

NZD:

Whole milk powder average prices rises to $3,226 a ton

USD:

Powell to give congressional monetary policy testimony Feb 28- Mar 1

Huge VIX trader elephant takes profits on volatility rally

Mnuchin says correct to say he supports a strong USD

CNY:

China PBoC says to step up market’s role in deciding Yuan’s exchange rate

USD/CNY:

Boston Globe: Trump said he’d shrink the trade deficit with China

Today’s data

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

NZD       Employment Change Q/Q Q4 A 0.50% | C 0.40% | P 2.20%

NZD       Unemployment Rate Q4 A 4.50% | C 4.70% | P 4.60%

JPY         Labour Cash Earnings Y/Y Dec A 0.70% | C 0.60% | P 0.90%

JPY         Leading Index CI Dec (P) A 107.9 | C 108.1 | P 108.3

EUR        German Industrial Production M/M Dec C -0.50% | P 3.40%

CHF        Foreign Currency Reserves Jan P 744B

CAD       Building Permits M/M Dec C 2.00% | P -7.70%

USD       Crude Oil Inventories P 6.8M

 

Harry Hindsight

• EUR: Opening around the 1.2370 levels the market struggled with mixed trading through the market as the equity markets followed through from the NYK session, as the markets settled down the Euro hit its early lows into the 1.2350 level and a steady rise through into the London session pushing to the 1.2400 levels, and rising quickly from the London opening, pushing through to the 1.2435 levels before hitting some offers, the market drifted through towards the NYK session and the Equities continued to rally from there lows the move to the opening saw the Euro dropping back quickly from the highs and quickly dipped to the 1.2350 level slowing a little to push eventually through to the 1.2320 area, the rise in equities slowed and the USD buying seemed to grind to a halt with the Euro again making gains through to the 1.2400 levels before drifting slightly off the level to the close.
• GBP: A similar patter through the day with the market in Cable dropping from the opening however, the fall back however, the Cable remained rather limited with the dips below the 1.3950 level limited and the market already returning to the opening level for the move into the grey hours, more Brexit concerns which in the end are just drafts and not in stone just yet, the move into the grey hours saw the market recovering a little to the 1.4000 areas before dropping off quickly through to the 1.3840 areas before finding some strong support and eventually moving off the level to recapture the opening levels around the 1.3960 areas on strongly contested day, for the most part the early reports of the EU’s demand pushed the market in panic mode, on the face of it the 37 demands if no custom union is negotiated would find the UK open to blocks on exports if any of the 27 countries felt it necessary to take it to arbitration however, the draft copy again was a leak and just that, so the market made a recovery into the mid-session in NYK and finishing the day very little different to where it opened.
• JPY: USDJPY suffered from the move into the Tokyo session with the market dipping down to the 108.50 level before finding support and the equity markets, the market started to recover from the lows and the move into the grey hours saw the market testing through to the opening levels around the 109.10 level before holding slowly through the London session with the market testing towards the 109.30 levels, NYK extended the highs through the 109.t60 level and although the market dipped through to the opening levels again the move to the close saw a return to those highs and a steady market to the close.
• AUD: A choppy day for the Oz with the market suffering the same equity movements and the Oz sold back through the 0.7840 level before holding and a steady rise through to the 0.7840 levels on the move into London, rising quickly from the opening the market pushed to the 0.7890 levels before giving up ground again through to the NYK session to test the lows, the NYK session saw the market start to steadily rise through to the close with the market putting in a quick spurt into the close testing to the 0.7910 levels.

Yesterday’s premiership results

GBP       BRC Sales Monitor Y/Y Jan A 0.60% | C 0.70% | P 0.60%

AUD       Trade Balance Dec A -1.36B | C 0.25B | P -0.63B | R 0.04B

AUD       Retail Sales M/M Dec A -0.50% | C -0.20% | P 1.20% | R 1.30%

AUD       RBA Rate Decision A 1.50 | C 1.50% | P 1.50%

EUR        German Factory Orders M/M Dec A 3.80% | C 0.70% | P -0.40% | R -0.10%

EUR        Eurozone Retail PMI Jan A 50.8 | P 53

CAD       International Merchandise Trade (CAD) Dec A -3.19B | C -2.3B | P -2.5B | R -2.71B

USD       Trade Balance Dec A -53.1B | C -52.1B | P -50.5B | R -50.4B

CAD       Ivey PMI Jan A 55.2 | C 60.7 | P 60.4

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.