Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 99.667 | EURUSD 1.3186 | EURJPY 131.415 | AUDUSD 0.92489 | NZDUSD 0.79562 | USDCAD 1.03352 | EURCHF 1.23443 | USDCHF 0.93618 | GBPUSD 1.53611 | EURGBP 0.8584 |

Harry Hindsight

  • EUR: With the Japanese elections out of the way, the Euro was given a little room to move higher with a weakening of the Yen, and we traded higher from the opening area around the 1.3140 area close to where the market closed on Friday, we rose to just short of 1.3170 in the Asian session before spending much of the session between 1.3150-60 with the run to London dipping slowly out of that range. London opening the market again started to move higher after a weekend of comments from Silva in Portugal some of the doom and gloom pieces of the weekend papers and news were corrected and the market was bolstered somewhat moving to the 1.3190. We drifted off from the highs as we moved to the NYK session before a weaker than expected number in the US lowered the USD further and Euro’s extended the high trade to just short of 1.3220 triggering weak stops through the figure area, once the highs were made the market again went back to sleep and slowly drifted back to below the 1.3190 level and we remain in the mid 80’s as we move to the close.
  • GBP: As with the rest of the market it was all about the USD with little data around to furnish the leveraged types. We opened just above the 1.5270 level and struggled to make gains dropping to below 1.5260 in pre-Tokyo before the market started to rally, rising to just short of the 1.5300 level the market stayed in a tight 1.5280-90 range for much of the session, dipping just before London as early Europeans choose the wrong way and were quickly removed from their shorts we moved quickly higher to trade through 1.5300 triggering stops that have accumulated over the past week to hold around the 1.5330 area. As the market started to shift away from the USD and with Portugal at the forefront of people’s minds the GBP seemed to become the currency of choice and we saw another leg up after the release of the one piece of data from  the US trading to above the 1.5380 by mid-NYK session. We’ve settled back over the balance of the US session and currently hold around the 1.5350 area as we head to the close. EURGBP opened around the 0.8600 level and suffered into the pre NYK part of the day where it began to droop from the 0.8610 level trading to just above 0.8580 and holding around those levels in a very quiet session.
  • JPY: In pre-market trading the USDJPY saw a high of 101.05 however, as jubilation over the result of the election waned and the results began to filter through that the LDP coalition had won with a reduced majority the market in the JPY strengthened with the knee jerk reaction correcting and the opening in line with Friday’s late rally around the 100.60 from that point it moved between 100.60-20 into the opening in Tokyo, fixing supply added to the market and we moved quickly to just short of 99.60 as the supply added to the pre-market longs being squeezed out of the market. We steadied around the 99.90 for a great portion of the day as the market digested the news and looked for anything that could be construed as good or bad from the news. Alas we had to wait for the one piece of data for the day out of the US and this not being up to expectations caused the USD to slip trading down to the 99.30 area during NYK before moving to 99.50 for the remainder of the day where we finish.
  • AUD: As with most days, the AUDJPY dominated the price action and as the USDJPY began to weaken the Oz started to rise, with the cross holding around the 92.00 level for most of the session the movement of USDJPY lower allowed the Oz to push back through the 0.9200 level after its break below on Friday. With the rest of the pairs it’s been a slow day volume wise and we spent the best part of Asia holding between 0.9210-30 into the London session where the market sold opportunist leveraged sellers pushing the Oz back below 0.9190 briefly before the market saw a steady rise over the rest of the day trading to above 0.9270 and settling into a pattern around the 0.9250 area where the market is settling.

Yesterday’s premiership results

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

14:00     USD       Existing Home Sales Jun A 5.08M | C 5.25M | P 5.18M

 

For today

USDJPY:
Topside: 100.00-100.30 light offers 100.30-100.60 light offers 101.00-101.40 light buy stops
Downside: 99.00-99.30 light-medium bids 98.70-99.00 medium sell stops 98.40-98.60 light bids

EURUSD:
Topside: 1.3230-1.3240 medium offers 1.3240-1.3260 light stops 1.3280-1.3300 medium offers
Downside: 1.3140-1.3170 light-medium bids 1.3120-1.3140 light bids 1.3020-1.3050 medium bids

EURJPY:
Topside: Nothing of note
Downside: 130.20-130.50 light bids

AUDUSD:
Topside: 0.9260-0.9270 medium offers 0.9270-0.9300 medium buy stops 0.9340-0.9360 light buy stops
Downside: 0.9200-0.9230 light mix 0.9170-0.9200 light sell stops 0.9140-0.9120 light sell stops 0.9120-0.9100 medium bids

 

CNY:

Premier says China GDP growth will bottom line is 7% – BJ News

Li says China economy at reasonable level BJ News (no change then)

NZD:

NZ house price rises may prompt RBNZ response

JPY:

Japan may need extra budget as it hikes sales tax FinMin

Japan’s Government raised its view on economy for the third straight month in July

Government states deflation is abating as a result of the nation’s expansionary policy

Kuroda: Difference in Japan-US monetary policy stance behind the weak Yen (nice)

FinMin states he has not seen any bad data recently and can’t understand reasons to oppose sales tax

 

 

  • EUR: The market opened around the 1.3185 area and made the lows into Tokyo only just off the opening, once we moved into Tokyo the market began to rise steadily through the session with only light interest in the pair pushing to a high above 1.3207 before meeting some resistance. We’ve drifted lower holding just below the 1.3200 level. Light fund buying impacted the market out of Japan but the movement was bolstered by leveraged types joining in.
  • GBP: Opening around the 1.5360 the range from here was pitiful with the market dipping to 1.5356 and crawling to above 1.5376 on the topside in a movement connected only to the Euro. EURGBP losing ground slightly over the course of the session by a little over 10 pips.
  • JPY: The market opened around the 99.55 area and traded quietly in pre-Tokyo moving up to above 99.65 and holding around the 99.60 area into the Tokyo opening. As soon as the Tokyo market opened we moved quickly lower as CTA type’s began selling triggering further selling from Japanese names pushing the pair to below the 99.20 level in a sharp move before we started to see a recovery. The market started to rally back slowly trading to close to the opening levels as we run to the London opening with some heavy volumes early on dropping off as the session progressed. Importers seen buying on the rally back to the opening levels.
  • AUD: With the AUDJPY holding in a tight range around the 92.00 level the Oz moved with the strength of the JPY initially before taking on an attempted technical move to the topside, opening around the 0.9250 area we pushed a little lower in early trading before rallying to above 0.9265 before breaking through and touching the 0.9285 level, for the moment the topside seems to be a little congested having triggered some stops on the move. We hold around the 0.9270 for the moment as we move towards London.

 

Today’s data

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

08:30     GBP       BBA Mortgage Approvals Jun C 38.5K | P 36.1K

12:30     CAD       Retail Sales M/M May C 0.30% | P 0.10%

12:30     CAD       Retail Sales Less Autos M/M May C 0.30% | P -0.30%

13:00     USD       House Price Index M/M May C 0.80% | P 0.70%

14:00     EUR        Eurozone Consumer Confidence Jul (A) C -18.3 | P -18.8

 

Interbank Ranges as of 6am London time

Highs    Lows

EURUSD              1.3208 | 1.3183

GBPUSD               1.5377 | 1.5357

JPYUSD                 99.67 | 99.14

CHFUSD               0.9365 | 0.9353

AUDUSD              0.9286 | 0.9243

CADUSD               1.0339 | 1.0322

NZDUSD               0.8007 | 0.7969
EURCHF                1.2353 | 1.2342
EURGBP               0.85905 | 0.8582
EURJPY                 131.48 | 13069

 

Good luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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