Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 99.234 | EURUSD 1.30655 | EURJPY 129661 | AUDUSD 1.02738 | NZDUSD 0.8419 | USDCAD 1.02566 | EURCHF 1.22059 | USDCHF 0.93419 | GBPUSD 1.52914 | EURGBP 0.8545 |

 

Harry Hindsight

·         EUR: Having opened higher after the weekend news and G20 the Euro did nothing moving steadily down from that opening 1.3075 area to trade below the 1.3055 into Tokyo as we filled in the gap on the charts, once that was done we saw some aggressive EURJPY buying as the market had failed to push straight USDJPY higher they tried using EURJPY only to find the Euro leg the weak side (obviously) and it quickly moved above the 1.3080 area before they gave up on that idea. From there we drifted towards the London opening moving into the grey hours around the 1.3065 level and early Eastern Europeans sold quickly to test the lows around 1.3050, the market found no space and we quickly recaptured the starting levels as we opened in London, EURJPY at this point started to come off quickly as the USDJPY dropped triggering some minor stops and this time we sailed through the 1.3050 level not stopping until the 1.3035 areas, the market held this area for a good portion of the session before another leg lower into the NYK session took the low to the 1.3015 levels. NYK markets were no better than what we’d seen with some minor data from Chicago and a  and the Euro was able to recapture most of its day moving steadily higher in the IMM session and holding the 1.3065 level once that market had dropped off to close around the levels.

·         GBP: Cable opened weakly trading in a similar pattern to the Euro with out the gap  higher at the start, moving from 1.5230 area to take a brief look below 1.5210 before bouncing back strongly after the selling mostly from one particular French bank, we topped out above the 1.5245 and traded sideways within the range during Asia and into early London before we started to see a change of fortunes with both Cable and EURGBP changing direction, Cable climbed steadily on the back of nothing and there was very little to explain the continual rise throughout the day moving to the 1.5290 area into the close in NYK, while EURGBP lower in two legs from the opening in London dropping from just under 0.8590 to 0.8555 and then again in early NYK to trade down to below 0.8545 and declining slightly into the close. It was mentioned that the attempted terrorist action in Canada was behind the selloff of the USD against Cable however, this I think was just fanciful thinking with nothing tangible to pin on the move. More likely scenario would be the fact that Scotland going it alone would not have the GBP, and Gordon Brown would not be able to mess up the finances again.

·         JPY: USDJPY opened higher on the opening around the 99.80 level and all through the Asian session there was a steady buy tone to the market however, it failed to push through the 99.90 level as the barrier remains in play, having traded there in the early Sydney session it didn’t move away from the area and I believe the quiet day was down to this early pressure, once we started to move to London the pressure lifted and the USDJPY finally started to move lower initially dropping back to the 99.60 level before again climbing back above the 99.80 level we held around the 99.70-80 areas into the NYK session and it was only at this point that it dropped back significantly and we saw weak stops being taken out of the market below the 99.60 and again below 99.50 as we tumbled quickly to touch below the 99.00 level before holding and pushing back to an unconvincing 99.40, the run to the close was only slightly more exciting than the Asian session with the day finishing around the 99.30 areas.

·         AUD: The Oz opened flat holding around the 1.0275 level and drifting initially lower to below 1.0270, as with the EURJPY we saw some carry trade buying with Oz rising and the USDJPY remaining static in the move to trade above the 1.0305 levels for a few hours however, it became more and more obvious as the day wore on that the market was unable to breech the 100.00 in USDJPY and the carry trade like the EURJPY began to drift lower as the buyers covered their positions dropping the Oz back to the 1.0280 areas, the move into London was a little more dramatic with the Oz dropping quickly from above the 1.0280 levels to the 1.0250 before holding the level until we moved into the NYK session. In NYK we again saw the Oz under pressure and we saw the market fall away to below the 1.0240 level during the session before regaining the 1.0270 area towards the close in NYK.

Yesterday’s premiership results

Actual = A | Consensus = C | Previous = P | Revised = R 

EUR        Eurozone Consumer Confidence Apr (A) A -22 | C -24 | P -23.5  

USD       Existing Home Sales Mar A 4.92M | C 5.02M | P 4.98M   

For today

USDJPY:
Topside: 99.40-99.70 medium sized buy stops 99.70-100.00 medium mix  100.00-100.30 medium offers
Downside: 98.40-98.60 light sell stops

EURUSD:
Topside: 1.3070-1.3100 light mix 1.3110-1.3140 decent buy stops 1.3140-1.3170 medium buy stops
Downside: 1.3000-1.3030 light sell stops 1.2970-1.3000 light bids

EURJPY:
Topside: 130.50-130.80 light buy stops
Downside: Nothing of note


AUDUSD:
Topside: 1.0300-1.0330 light offers 1.0330-1.0360 light mix
Downside: 1.0200-1.0220 light bids 1.0170-1.0200 light sell stops

 

JPY:

S&P says more than 1/3 chance of Japan downgrade, cites risks to Abenomics

BOJ Gov Kuroda: Market Expectations for Price Increases Gradually Changing

Aso: I Visit Yasukuni Few Times a Year, so Doesn’t Warrant Comment

JPY/KRW:

S. Korea Says G-20 Didn’t Endorse Weak Yen Policy: Infomax

JPY/CNY:

Japan PM Vows Force if Chinese Land on Disputed Isles

JPY/CNY:

Japan Summons China Envoy, Lodges Protest over Ship Movements around Senkakus- Kyodo

CNY:

China HSBC Flash PMI falls, points to tepid Q2 recovery

China Industry Ministry Official: See Downward Pressure on Industrial Production

AUD:

Ellis Says RBA Doesn’t See Major Housing Reversal in Australia

KRW:

N. Korea Ready to Conduct Nuclear Test since Feb, S. Korea Says

North Korea demands recognition as nuclear arms state

 

 

·         EUR: The Euro moved steadily lower in the Asian session moving to touch below 1.3035 in slow trading with JPY dominating the market, with only Chinese PMI data out it’s been another slow day in everything other than JPY, we currently hold around the 1.3040 area as we head to London. Hey but at least the Italians have got a new President the same one they had before who I believe is not a happy bunny it took so many votes to re-elect him.

·         GBP: After yesterday’s rallies Cable struggled to maintain its momentum with offers sitting just above the highs of today, we opened around the 1.5290 and pushed early in the session to just above the 1.5295 area but failed to get through, once the CNY PMI figures materialised and varies little titbits of news materialised we saw GBPJPY selling hit the market pushing it lower in two legs down to 1.5270 and again to 1.5255 to make the low for the day in a quiet session.

·         JPY: USDJPY continued to fall back from yesterday’s highs moving into the Asian session around the 99.20 level and touching just below 99.40 in early trading tensions between S.Korea and China over issues arising from events 70yrs ago had little bearing on the market however, we saw the market gradually fall back once we moved into the Tokyo session and once we moved below 99.00 a succession of weak stops left by longs were triggered sending the market down to trade below 98.60 as the market gives up on the 100.00 target for the moment. We rebounded somewhat and are currently holding around the 98.80 level as we head towards the London session.

·         AUD: The Oz faced two different factors today not unusual, it ignored its own numbers and focused on a drop in the PMI in China and a strengthening JPY moving the Oz from the opening 1.0275 levels moving steadily into Tokyo to drop quickly after the number to 1.0255 area and again on the move in USDJPY to the 1.0220 area before stabilising and holding for the move into London around the 1.0235 level.

 

Today’s data

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

AUD       Conference Board Leading Index Feb A 0.30% | P 0.20%               

CNY        HSBC Flash Manufacturing PMI Apr A 50.5 | C 51.4 | P 51.6          

06:00     CHF        Trade Balance (CHF) Mar C 1.73B | P 2.10B          

07:00     EUR        French PMI Manufacturing Apr (P) C 44.2 | P 44

07:00     EUR        French PMI Services Apr (P) C 42.3 | P 41.3         

07:30     EUR        German PMI Manufacturing Apr (A) C 49 | P 49

07:30     EUR        German PMI Services Apr (A) C 51.1 | P 50.9      

08:00     EUR        Eurozone PMI Manufacturing Apr (A) C 46.8 | P 46.8      

08:00     EUR        Eurozone PMI Services Apr (A) C 46.7 | P 46.4    

08:30     GBP       Public Sector Net Borrowing (GBP) Mar C 13.9B | P 4.4B

10:00     GBP       CBI Trends Total Orders Apr C -14 | P -15              

12:30     CAD       Retail Sales M/M Feb C 0.30% | P 1.00%               

12:30     CAD       Retail Sales Less Autos M/M Feb C 0.50% | P 0.50%         

13:00     USD       House Price Index M/M Feb C 0.70% | P 0.60% 

14:00     USD       New Home Sales Mar C 419K | P 411K   

21:00     NZD       RBNZ Rate Decision C 2.50% | P 2.50%   

Interbank Ranges as of 6am London time

                                Highs    Lows

USD/JPY               99.385 | 98.59

EUR/USD             1.3068 | 1.3033

EUR/JPY               129.83 | 128.55

AUD/USD            1.0272 | 1.0221

NZD/USD             0.8430 | 0.8377

USD/CAD             1.0275 | 1.0252

EUR/CHF              1.2209 | 1.2199

USD/CHF             0.9369 | 0.93425

GBP/USD             1.5298 | 1.5255

EUR/GBP             0.85455 | 0.8536

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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