Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 102.343 | EURUSD 1.2856 | EURJPY 131.578 | AUDUSD 0.96165 | NZDUSD 0.81033 | USDCAD 1.03995 | EURCHF 1.25602 | USDCHF 0.97694 | GBPUSD 1.50395 | EURGBP 0.85484 |

 

Harry Hindsight

  • EUR: The market moved quietly from the opening 1.2930 area peaking just above the opening and into Tokyo where we saw fresh buying of USD’s across the board taking the market to below the 1.2890 level before finding some bids sufficient to hold the Macro buyers of USD’s, the market then turned to the topside as an increase in cross buying against the JPY kicked in and we saw EURJPY and AUDJPY being bought by retail Japan and while volumes were healthy the market seemed rather sedate after the UK, US holidays. By the time we reached the grey hours the Euro was only just short of the opening and early East Europeans entered the market following the overnight trend to buy USD’s and we entered the London session around the 1.2900 area, with no relevant data out of Europe the market was more focused on the tapering of QE in the US and although we saw buying in Europe in the lead up towards US numbers it felt more as an adjustment of shorts taking back before numbers as the Euro made highs just short of 1.2950. a decent number on shiller composite saw the USD again taking the foreground and Euro’s again dropped off to the middle of its range into the consumer confidence number which should a large leap higher and the rest is history as they say as the Euro dropped quickly with large retail/HFT selling hitting the market triggering some weak stops through the previous holding area and down towards the 1.2850 level, there was very little in the way of a bounce and the market stayed pinned below the 1.2880 level for several hours into the close in NYK.
  • GBP: Cable was unable to make headway against either the Euro or the USD with no data from the UK it struggled to follow Euro’s higher for the periods it rose and the EURGBP in a tight range, holding for the most part between 0.8540-60. Cable dropped initially in Asia with the Euro dropping from the 1.5100 level to below 1.5070 in early trading only to return to the opening levels for the move into the later part of Asia and into the London session never really threatening against either of the two major currencies, it was dragged a little higher as Euro moved to its highs however, the 1.5130 level proved too much and the fall was as deep as the Euro’s on the US data broaching the 1.5030 into the closing in NYK.
  • JPY: USDJPY opened very quietly in the pre-market moving slowly from the 101.00 area into Tokyo before the opening in Nikkei, which rallied strongly and the USDJPY rose in line quickly reaching the first holding area of 101.80 and spending much of the Asian session banging up to the 102.00 without finding the breakthrough before the London session opened. Once we moved into the London session the sheer volume eventually pushed it through however, while it pushed higher it ran into continued selling from real money types willing to selling into the Macro buyers, with the US data releases you’d have been forgiven in believing that another decent move would be on the cards however, while we did manage to push to the 102.50 area the supply remained constant and it’s been held for the most part between 102.00-102.50 throughout the NYK session, finishing towards its highs.
  • AUD: The Oz was the only one that really benefitted from the Yen weakness and having moved from the opening and dipped under the pressure of the USD from the 0.9630 area it found some minor support around the 0.9600 for an 11 month low, we then saw AUDJPY carry trade buying the first for several days and as the Yen weakened the Oz moved steadily higher not stopping until we moved into the London session and stalling just below 0.9700 as with the other currencies once the US data was released the USD squeezed higher and most currencies declined including the Oz falling back to around the opening area initially and holding for several hours before late selling appeared in the Oz to take us down to the 0.9610 area into the close.

Yesterday’s premiership results

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

JPY         Corporate Service Price YoY Apr A -0.40% | C -0.20% | P -0.20%

CHF        Trade Balance (CHF) Apr A 1.73B | C 2.02B | P 1.89B

USD       S&P/Case-Shiller Composite-20 YoY Mar A 10.90% | C 10.05% | P 9.32%

USD       Consumer Confidence May A 76.2 | C 69.8 | P 68.1

 

For today

USDJPY:
Topside: 102.60-102.90 light buy stops 102.90-103.20 medium sized offers
Downside: 101.70-102.00 light bids 101.40-101.70 medium sized sell stops

EURUSD:
Topside: 1.2900-1.2940 light buy stops 1.2940-1.2975 light mix
Downside: 1.2810-1.2840 light mix 1.2780-1.2810 light bids

EURJPY:
Topside: 131.70-132.00 light buy stops 132.00-132.40 light buy stops
Downside: 130.70-131.00 light sell stops

AUDUSD:
Topside: 0.9640-0.9670 light mix 0.9670-0.9700 light buy stops
Downside: 0.9540-0.9550 medium bids

 

JPY:

Bank of Japan’s Kuroda Says Stable Financial System Is Important

Japan must show path to fiscal reform-coalition partner

CNY:

IMF Cuts 2013, 2014 GDP Growth Forecast for China to 7.75%

China to Levy Real-Estate Tax on Incremental Housing -Report

AUD:

Pimco Says Australian Interest Rates to fall

Australia Q1 construction work falls 2.0% QoQ

  • EUR: A steady day for the Euro so far with Asia more focused on the Oz than normal we moved off the opening levels around the 1.2855 area and moved quietly into the Tokyo market and the Euro then followed the drop in the Oz as EURAUD buying wasn’t enough to hold the Euro we dipped only to the 1.2840 area meeting some small bids from range players and held on the lows for a couple of hours before the pressure was released and we steadily climbed back pushing to above the 1.2860 level this time it felt as if we were hunting for the alluded stops in EURJPY however, the market in the USDJPY was having none of it and they remained intact for another day and Euro’s moved slowly away and back to the opening levels with only moderate demand for the common currency.
  • GBP: Cable moved pretty much in tandem with the Euro with no real impetus in itself, the market initially moved higher on the open to set the high above 1.5040 but then drifted lower and dropped on the opening in Tokyo to below 1.5020 before recovering over the balance of the session and we currently hold around the 1.5030 levels.
  • JPY: USDJPY dropped a little during the pre-Tokyo market moving to 102.20 from the opening 102.35 area, on the Tokyo opening we saw some demand as the Oz dropped for USDJPY and it moved to just above the 102.50 area and again as with EURJPY there are supposed to be stops just above the highs but the market failed to get amongst for the moment. Having failed the highs and Oz was now tipping towards fresh lows the carry trade was again deemed to be a poor bet and we saw some moderate selling of the carry trade from retail Japan and we pushed to just above the 102.00 level before holding in the area for a few hours before pushing back to the opening levels where we currently hold.
  • AUD: The Oz started the day drifting from the opening in a follow through of late NYK selling as if someone already knew what was coming, we opened around the 0.9615 area and as we hit the Tokyo open and the release we’d seemed to have stopped the decent, a poor leading indicator sent the Oz to lows not seen since Oct 2011 and the decline is somewhat reminiscent of last year’s falls to the 0.9600 level around the same time of year, we’ve seen several reports from banks as they adjust their consensus on 1st Quarter GDP, we held the 0.9550 level for the most part and have stayed in a tight range between 0.9560-75 for the most part for several hours, with one suspects stops now at both sides of the market London could be in for a busy session as we’ve seen more than our fair share of Oz changing hands.

 

Today’s data

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

JPY         Retail Trade Y/Y Apr A -0.10% | C -0.40% | P -0.30%

AUD       Westpac Leading Index M/M Mar A 0.20% | P 0.60%

06:00     CHF        UBS Consumption Indicator Apr P 1.25

07:55     EUR        German Unemployment Change May C 4K | P 4K

07:55     EUR        German Unemployment Rate May C 6.90% | P 6.90%

08:00     EUR        Eurozone M3 Y/Y Apr C 2.90% | P 2.60%

10:00     GBP       CBI Reported Sales May C 4 | P -1

12:00     EUR        German CPI M/M May (P) C 0.20% | P -0.50%

12:00     EUR        German CPI Y/Y May (P) C 1.30% | P 1.10%

14:00     CAD       BoC Rate Decision C 1.00% | P 1.00%

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.525 | 102.015

EUR/USD             1.2865 | 1.2841

EUR/JPY               131.70 | 131.145

AUD/USD            0.9610 | 0.9547

NZD/USD             0.8089 | 0.8050

USD/CAD             1.0417 | 1.0400

EUR/CHF              1.2560 | 1.2520

USD/CHF             0.9780 | 0.9737

GBP/USD             1.5037 | 1.5020

EUR/GBP             0.8556 | 0.85485

 

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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