Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 99.057 | EURUSD 1.33344 | EURJPY 132.082 | AUDUSD 0.9318 | NZDUSD 0.8158 | USDCAD 1.03234 | EURCHF 1.2366 | USDCHF 0.92734 | GBPUSD 1.5898 | EURGBP 0.83877 |

 

Harry Hindsight

  • EUR: A strong start to the day saw the market gap open from Friday’s close around the 1.3365/75 area rising before Tokyo to above the 1.3380 were the market met some stiff offers. While the market dropped back from the highs there was nothing left in the market to direct it in one direction or the other with leverage accounts smarting after the gap and resistance steady. The market then remained in a tight range for the balance of the Asian session holding between the 1.3360-70 level for the most part. London when we got there was a little different with early day traders selling just before the opening on the back of resistance above to push the market to the 1.3340 level however, although we attempted the level twice, those caught short with deep pockets remained in the market to buy any dips. NYK opened with early sellers of the USD as retail played catch up from the Asian open and we again saw the market trying to push up through the offers above 1.3380, this time lasting almost as long above the level as the previous attempt. The market drifted from this point pushing steadily lower down through the 1.3340 level to touch the 1.3330 levels before finishing the day around the 1.3335 area. Of course the driving factor behind the movement was the resignation of Summer’s as front runner for the Fed Chairmanship role most believed he was a shoe in for. German Chancellor Merkel scored a success in the voting in Bavaria, securing a large majority win of 101 from the available 180 seats.
  • GBP: As with the Euro, Cable opened above the 1.5940 level and then traded slightly higher over the course of Asia, holding the 1.5930 level on dips we gradually moved and held for a good portion of the day above the 1.5950 level with only minor adjustments. London saw the market begin to drift lower trading slowly into the NYK opening around the 1.5920 area. The move into NYK saw the same move higher as the Euro for the market to peak above the 1.5960 level before drifting off to the close holding the 1.5900 level.
  • JPY: Strange animal the USDJPY, as with all the other USD pairings the USDJPY opened lower around the 98.80 level and having pushed this low saw a renewed set of selling as AUDJPY selling hit the markets as rising AUD made the market believe levels were much higher than they were and USDJPY traded below the 98.50 level before the mirage disappeared. We steadily climbed from the lows pre Tokyo into the Tokyo fix to trade above the 99.10 level and filling in half the gap, before settling back to trade around the 98.90 area trading for most of the Asian session around that level. Early Europeans sold lightly taking the market to the 98.70 levels in light but continual selling before London opened officially and put the market back to the 98.90 area. The same USD selling occurred into the early part of the NYK session pushing the market back below 98.70 however, like the other majors the market started to push as USD found some limited support on the back of in line numbers generally. We finished the day back above the 99.00 area peaking just below 99.20 before drifting slightly into the close around 99.10.
  • AUD: The market opened higher just the same as EUR, Cable etc. Holding around the 0.9330 area the market started to move up from the opening and in a move above the 0.9350 area the market moved quickly higher with suggestions that an algo model went rouge and destroyed the liquidity on the interbank D2 platform triggering orders as high as 0.9540, the rest of the market was split on the highs however, general consensus was around the 0.9390-95 area with the major Oz banks calling those levels as true levels. Of course the powers that be scrapped all the deals on their machine to 0.9370 where the algo one assumes started its activities, leaving the official measure a goodly distance from where the rest of the market had traded. After the shenanigans the market settled back to the opening area and traded a reasonably tight 0.9320-40 range into the grey hours. Early players began the buying with cross selling in EURAUD and Oz buying in general driving the market into the NYK session to again move towards the 0.9390 level before moving into the NYK session. The USD’s recovery after the figures was a steady move and we moved to the 0.9320 area before the market started to hold up as limited profit taking kicked in and we dipped to make a low just above the 0.9300 before the close just above the levels.

Yesterday’s premiership results

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

NZD       Westpac NZ Consumer Confidence Q3 A 115.4 | P 116.6

GBP       Rightmove House Prices M/M Sep A -1.50% | P -1.80%

EUR        Eurozone CPI M/M Aug A 0.10% | C 0.10% | P -0.50%

EUR        Eurozone CPI Y/Y Aug (F) A 1.30% | C 1.30% | P 1.30%

EUR        Eurozone CPI – Core Y/Y Aug (F) A 1.10% | C 1.10% | P 1.10%

CAD       International Securities Transactions (CAD) Jul A 6.09B | C -2.23B | P -15.41B

USD       Empire State Manufacturing Sep A 6.3 | C 9 | P 8.24

USD       Industrial Production Aug A 0.40% | C 0.40% | P 0.00%

USD       Capacity Utilization Aug A 77.80% | C 77.80% | P 77.60%

 

For today

USDJPY:
Topside: 99.40-99.80 light offers 99.80-100.10 light offers 100.20-100.50 light buy stops
Downside: 98.50-98.80 light sell stops 98.20-98.50 light mix

EURUSD:
Topside: 1.3380-1.3400 medium offers 1.3420-1.3450 light buy stops
Downside: 1.3300-1.3320 light bids 1.3240-1.3280 light sell stops 1.3210-1.3240 light bids

EURJPY:
Topside: 133.00-133.40 light offers
Downside: 131.40-131.70 light bids

AUDUSD:
Topside: 0.9380-0.9400 medium offers 0.9400-0.9430 light buy stops
Downside: 0.9260-0.9280 light bids 0.9230-0.9210 light sell stops

 

JPY:

PM Abe Tells Investors Japan Is Now Clearly a ’Buy’: Nikkei

Amari: PM’s Views More Important Than MOF’s Views

Japan FinMin: hard to cut corporate tax while raising sales tax

Abe to Visit Fukushima Nuclear Plant on Sept. 19, Suga Says

Japan wants to consider lowering nuclear dependence – trade minister

JPY/KRW:

Japan to Strongly Urge South Korea to Lift Import Ban, Suga Says

CNY:

China January-August Foreign Direct Investment +6.37% on Year at $79.8 Bln

China trade growth to stabilise in coming months-ministry

Chinese Govt think tank, ratings agency to launch local Govt debt ratings

Shanghai Free Trade Zone to Launch on Oct. 1 -Commerce Ministry

China Local Govt Debt Likely Hit CNY20 Trillion -State Researcher

AUD:

Australia CB keeps options open on rate cuts, nothing imminent

Australia merchandise imports rise further in Aug

NZD:

N.Z. Treasury Expects Economy Shrank 0.2% in 2Q, Joyce Says

 

 

  • EUR: The market seemed to be more intent on filling the gaps created from yesterday’s high opening however; it was never going to be in the Euro which limped along with minor interference from the RBA statement. We opened around the 1.3338 area and started to decline moving into the mid 1.3320’s before holding and moving back higher once the RBA news was out of the way. For the moment we hold just short of the opening levels in what has been a reasonably quiet session.
  • GBP: If you thought the Euro was quiet then you’d be not pleased with the slight range we’ve seen in the Cable opening around the 1.5900 level and peaking early to above the 1.5905, making the attempt once move in Tokyo before starting to slip back a little touching just below the 1.5890 areas and now holding around the 1.5895 levels as we move towards the grey hours.
  • JPY: USDJPY continued its steady rise as a follow on from late NYK pushing to fill the gap from the opening 99.10 areas to above the 99.35 level peak completing the move, from there the market has held steady around the 99.25-99.30 level with little interest in the pair.
  • AUD: The Oz opened quietly in front of the RBA minutes around the 0.9320 level, the market saw some early cross AUD selling against both the NZD and JPY but only light with tech types selling as the market looked at filling the gap. When the statement was released it proved to be neither one way or the other with the comment “should neither close off the possibility of reducing rates further, nor signal an imminent intention to reduce rates further”, initially the market moved quickly to above the 0.9335 before dropping just as quick back lower to the 0.9285 level still only just over half way through the gap. While the market moved off the lows and back above the 0.9310 level it has struggled to the upside, with the market falling back into the previous mind set where RBA set the 0.8700 as a base target area. For the moment we hold just above the lows in the mid 0.9290’s

Today’s data

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

CNY        Conference Board Leading Index A | P 1.40%

08:00     EUR        Eurozone Current Account (EUR) Jul C 18.3B | P 16.9B

08:30     GBP       PPI Input M/M Aug C 0.20% | P 1.10%

08:30     GBP       PPI Input Y/Y Aug C 3.00% | P 5.00%

08:30     GBP       PPI Output M/M Aug C 0.20% | P 0.20%

08:30     GBP       PPI Output Y/Y Aug C 1.80% | P 2.10%

08:30     GBP       PPI Output Core M/M Aug C 0.10% | P 0.10%

08:30     GBP       PPI Output Core Y/Y Aug C 1.10% | P 1.10%

08:30     GBP       DCLG UK House Prices Y/Y Jul C 3.30% | 3.10%

08:30     GBP       CPI M/M Aug C 0.50% | P 0.00%

08:30     GBP       CPI Y/Y Aug C 2.70% | P 2.80%

08:30     GBP       Core CPI Y/Y Aug C 2.10% | P 2.00%

08:30     GBP       RPI M/M Aug C 0.40% | P 0.00%

08:30     GBP       RPI Y/Y Aug C 3.20% | P 3.10%

09:00     EUR        German ZEW (Economic Sentiment) Sep C 45 | P 42

09:00     EUR        German ZEW (Current Situation) Sep C 20 | P 18.3

09:00     EUR        Eurozone ZEW (Economic Sentiment) Sep C 47.2 | P 44

09:00     EUR        Eurozone Trade Balance (EUR) Jul C 15.3B | P 14.9B

12:30     CAD       Manufacturing Shipments M/M Jul C 0.50% | P -0.50%

12:30     USD       CPI M/M Aug C 0.20% | P 0.20%

12:30     USD       CPI Y/Y Aug C 1.60% | P 2.00%

12:30     USD       CPI Core M/M Aug C 0.10% | P 0.20%

12:30     USD       CPI Core Y/Y Aug C 1.80% | P 1.70%

13:00     USD       Net Long-term TIC Flows Jul C -45.3B | P -$66.9B

14:00     USD       NAHB Housing Market Index Sep C 59 | P 59

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               99.36 | 99.01

EUR/USD             1.3340 | 1.33255

EUR/JPY               132.43 | 132.07

AUD/USD            0.9335 | 0.9285

NZD/USD             0.8190 | 0.8160

USD/CAD             1.0334 | 1.0317

EUR/CHF              1.2369 | 1.2359

USD/CHF             0.9279 | 0.9268

GBP/USD             1.5904 | 1.5890

EUR/GBP             0.83885 | 0.83835
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.