Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 98.506 | EURUSD 1.33693 | EURJPY 131.681 | AUDUSD 0.9028 | NZDUSD 0.78523 | USDCAD 1.05022 | EURCHF 1.23408 | USDCHF 0.92296 | GBPUSD 1.55754 | EURGBP 0.85834 |

 

Harry Hindsight

  • EUR: A dismal day overall with Australia out to start the day off with and tight ranges is most of the pairings. Euro’s opened around the 1.3380 level and did little over the Asian session rising to above the 1.3390 in early trading before drifting off to make the lows just below 1.3380 before trading around the level into the grey hours. Early Europeans started to sell the market and we managed a move to 1.3365 however, with the London market albeit closed the market struggled into NYK between that low and 1.3375. NYK opened with early US sellers and day traders cutting longs to make the low for the day below 1.3360 only for poor data releases to turn the market back to the opening areas and a high just short of the 1.3395 level, from there it was a quiet session and the market slowly drifted back to the 1.3370 levels holding into the close.
  • GBP: With trading similar to the Euro the market was reasonably quiet as you’d expect with commonwealth countries out for the day and only limited data releases, the market remained focused on peripheral stories such as Syria and the only impact on the day was the US numbers. We opened around the 1.5570 area and played a very tight range through Asia touching the 1.5585 mark before slipping back to 1.5565, while Euro’s dipped during the grey hours Cable remained around the 1.5570 mark before EURGBP selling moved into the market during mid-morning to take cable above the previous high, but only just. From there it drifted lower into the US releases and as with the Euro moved quickly to higher trading to 1.5612 areas before drifting lower over the course of the remaining part of the session to finish only slightly above the opening.
  • JPY: USDJPY was probably the biggest mover over the course of the day, with pre-market selling taking the market to 98.17 before bouncing back for the official opening closer to the close on Friday, we moved steadily higher from the 98.58 level to touch above the 98.80 area an hour or so into the Tokyo session however, from this point the market was quiet with volumes massively off from the summer norms. The market held after the drop around the 98.65 level into the grey hours where the market started to give ground as early Europeans stepped into the market dropping the pair down to the 98.45 levels from here the market again stalled as we moved into the London session struggling back to the opening levels before dropping off quickly on the US data and a fuller market in the US. The market recovered from its lows below 98.30 and slowly moved to the 98.75 level however, late profit taking by leveraged players saw the market drop back towards the close to around the 98.50 area.
  • AUD: The opening for the AUD was quiet around the 0.9030 area and not until we moved into the Tokyo market did we see any movement and that was just a general drift lower in the early part of the session to just above the 0.9010 level. Fixing in CNY helped the AUD to start a move back higher however, it was limited and we stalled around the 0.9040 level and then traded very quietly into London. We drifted to make the lows below 0.9010 pre data release catching the fall in USD’s and touching the 0.9070 are quickly in an over exaggerated move, before a long drift back to the starting area into the close in NYK.

Yesterday’s premiership results

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

NZD       Trade Balance (NZD) Jul A -774M | C -16M | P 414M | R 374M

JPY         Corporate Service Price Y/Y Jul A 0.40% | C 0.40% | P 0.40%

USD       Durable Goods Orders Jul A -7.30% | C -3.60% | P 4.20% | R 3.90%

USD       Durables Ex Transportation Jul A -0.60% | C 0.50% | P 0.00% | R -0.10%

 

For today

USDJPY
Topside: 98.60-98.80 light offers 98.80-99.10 light offers
Downside: 98.00-98.10 light bids 97.70-98.00 light sell stops 97.30-97.60 medium sell stops

EURUSD
Topside: 1.3390-1.3410 light offers 1.3450-1.3470 light buy stops 1.3470-1.3500 medium offers
Downside: 1.3300-1.3345 light bids 1.3300-1.3290 light sell stops 1.3250-1.3280 light mix

EURJPY
Topside: Nothing of note
Downside: 131.00-131.30 light sell stops

AUDUSD
Topside: 0.9050-0.9080 light offers 0.9080-0.9100 medium offers 0.9100-0.9120 light buy stops
Downside: 0.8980-0.9010 light sell stops 0.8920-0.8950 medium sell stops 0.8880-0.8900 light bids

 

USD:

Obama talks Syria with Australia’s Rudd; Rice meets Israelis

OIL:

Saudi Arabia Offered Russia Oil Deal, As-Safir Reports

JPY:

Japan EconMin: No instructions from PM Abe to mull corporation tax cut

Aso: Abe Hasn’t Ordered Specific Discussion of Corporate-Tax Cut

Japan PM Abe Seeks Talks with China, South Korea Leaders: NHK

Tepco Says Fukushima Plant’s Water Bypass System Ready to Use

CNY/JPY:

China sees no basis for talks with Japan over islands dispute

CNY:

China’s Vice FinMin says no need for economic stimulus

U.S. Must Consider Spill over Effect of QE Exit, China’s Zhu Says

China July industrial profits up 11.6% YoY

China Jan.-July Cross-Border Yuan Settlement 2.4t Yuan: PBOC

NZD:

NZ’s Fonterra raises 2014 milk price forecast

 

 

  • EUR: Another day in paradise so the saying goes with the heady financial markets of Asia not ablaze, we opened the day around the 1.3370 area and limped into the Tokyo session with the market starting to rise as USD dropped slowly, this was then offset by a report in Syria that an attack was imminent from the US, with warnings from Russia against it however, with inspectors on the ground and only initial results filtering through to the agencies this is very unlikely. This caused the USD to rally why I’ve never worked out however; there is always a logical answer to why USD rallies when the US starts delivering cruise missiles. The market then spent the rest of the session holding around the 1.3370-75 level. With volumes only slightly better than yesterday one hopes the day session improves.
  • GBP: The Cable had the same type of movements as the Euro and again stays joined at the hip during the Asian session, moving from the opening 1.5575 area we moved to above the 1.5592 level only to drop back quickly to 1.5562 on the Syria comments before rising slowly over the remainder of the day to the opening levels in a quiet session for the pair.
  • JPY: USDJPY struggled for the most part today with the market opening around the 98.50 level we moved quietly to the Tokyo open and started to see sellers with expectations of supply for the fixing, this turned initially into a USD selloff if somewhat limited in movement, once the fixing was behind the market moved off the lows just below 98.05 to trade in the 98.25-35 areas for a good portion of the session before starting again to dip towards the lows as we move into the grey hours.
  • AUD: The market opened around the 0.9030 area and seemed to be holding its own into the Tokyo market when the Syrian comments were made, given that Obama and Rudd the impact was seen more noticeably in the AUD as it dropped through the 0.9000 level triggering stops and tumbling to 0.8970 before finding a base, we traded the balance of the session between the low and the 0.8990 level until we moved towards the grey hours when fresh selling started to appear from early Europeans.

 

Today’s data

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

08:00     EUR        German IFO – Business Climate Aug C 107 | P 106.2

08:00     EUR        German IFO – Current Assessment Aug C 111 | P 110.1

08:00     EUR        German IFO – Expectations Aug C 103.1 | P 102.4

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Jun C 11.90% | P 12.20%

14:00     USD       Consumer Confidence Aug C 79.3 | P 80.3

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               98.545 | 98.04

EUR/USD             1.3391 | 1.3367

EUR/JPY               131.725 | 131.25

AUD/USD            0.9030 | 0.8968

NZD/USD             0.7856 | 0.7806

USD/CAD             1.0519 | 1.0498

EUR/CHF              1.2339 | 1.2320

USD/CHF             0.9229 | 0.92035

GBP/USD             1.5592 | 1.5561

EUR/GBP             0.8592 | 0.8583

Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

Any opinions, news, research, analyses, prices or other information ("information") contained on this Blog, constitutes marketing communication and it has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the information 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. LMAX Group 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 Group 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 produced information was obtained from sources deemed to be reliable, LMAX Group 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. It is not a place to slander, use unacceptable language or to promote LMAX Group or any other FX 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.