Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 104.305 | EURUSD 1.35618 | EURJPY 141.454 | AUDUSD 0.88072 | NZDUSD 0.83114 | USDCAD 1.09683 | EURCHF 1.23421 | USDCHF 0.91006 | GBPUSD 1.6478 | EURGBP 0.8230 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               104.58 | 103.97

EUR/USD             1.35805 | 1.3553

EUR/JPY               141.77 | 141.07

AUD/USD            0.8874 | 0.8788

NZD/USD             0.8327 | 0.8306

USD/CAD             1.0978 | 1.0961

EUR/CHF              1.2351 | 1.23435

USD/CHF             0.9109 | 0.9095

GBP/USD             1.6492 | 1.6469

EUR/GBP             0.82355 | 0.82275

 

For today

  • EUR: After a weak start with the movement being negligible in the first couple of hours we moved off the 1.3565 levels as early EURJPY sellers appeared however, it was short lived and supply in USDJPY helped the Euro to move above the 1.3570’s before holding in the area. Half way through the session the USDJPY again saw weakness primarily allowing the Euro to make its highs above the 1.3580 levels as we moved towards the London session the market saw strong buying in the USD both specifically through the USDJPY this sent the Euro back lower and we currently hold around the 1.3555 levels as we head into the grey hours. Light mix appears above the highs for the moment with stops beginning to build above the 1.3620 levels going back to the mid 1.36’s and certainly looks to be a little weak. The downside shows some reasonable bids around the 1.3510-00 levels before some larger stops start to make an appearance around the 1.3480 level, with light bids every 10 pips or so beyond.
  • GBP: Cable has held a tight range opening around the 1.6475 level and moving from the opening to above the 1.6490 in the one attempt to get out of the pattern on the charts. The market having failed on the topside has since drifted back to the lows and is holding around the 1.6470 levels. With light bids appearing down towards the 1.6400 level and stops below 1.6380 that does look the weakest side however, that has been the case for several days. Topside still sees good offers from above the 1.6490 levels to 1.6520 with some light mixture of stops appearing and only a clear break of 1.6550 will open up a test of 1.6600
  • JPY: USDJPY remained in a reasonably tight range for most of the session opening around the 104.30 area trading 10 pips either side in the first half of trading, some mild comments set the market back as we started to move towards the figures however, another weak figure had the market surging from the lows just below 104.00 to put in a high above the 104.55 level to turn the market on its head. While the number was a little disappointing one suspects that the earlier sellers were caught off guard and the resultant scramble to cover shorts did the damage for the moment we hold just off the highs. Offers still there from the 104.70 levels back to 105.00 and then again to 105.40 from the figure though the size of those offers increases with stops now starting to appear beyond 105.50. Downside still remains with light bids to 104.00 and then thicker size to 103.80 before we start to see the first set of reasonable stops appearing, market is a bit thin to the 103.50 levels  but bids are likely from the 103.20 area.
  • AUD: Well that about puts paid to any rate cuts for the moment as the inflationary numbers all came in higher than expected. The market had opened around the 0.8810 level with no change over the past 24hrs, weak selling in the carry trade missed an opportunity as the numbers had the market moving quickly off the 0.8790 lows to above the 0.8860 level to peak just north of 0.8870, although the market has stalled since the initial moves we still hold most of the gains around the 0.8860 levels. Most of the stops on the 0.88 cent handle have now been cleared however; there is a large mixture above the highs that may hold the market in check with offers just out weighing the stops. Downside looks less weak, with bids now coming into the market around the 0.8800 levels where it was all stops at the start of the session, with light bids extending from the 0.8760 to 0.8720 levels and suspected bottom pickers below that.

Overnight News

JPY:

BOJ stands pat on policy, sticks to inflation forecasts

Tepco Detects Record Radiation at Fukushima Nuclear Plant

AUD:

Australia inflation spikes in Q4, shuts door on rate cut

Australia consumer sentiment slips again in Jan-survey

CNY:

China NDRC to Continue to Implement Prudent Monetary Policy

NDRC Official Says China Has Taken Steps on Shadow Banking

NZD:

N.Z. Labour to Drop Tax-Free Income Zone Policy, Cunliffe Says
Today’s data

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

AUD       CPI Q/Q Q4 A 0.80% | C 0.50% | P 1.20%

AUD       CPI Y/Y Q4 A 2.70% | C 2.50% | P 2.20%

AUD       CPI RBA Trimmed Mean Q/Q Q4 A 0.90% | C 0.60% | P 0.70%

AUD       CPI RBA Trimmed Mean Y/Y Q4 A 2.60% | C 2.30% | P 2.30%

AUD       CPI RBA Weighted Median Q/Q Q4 A 0.90% | P 0.60%

AUD       CPI RBA Weighted Median Y/Y Q4 A 2.60% | P 2.30%

JPY         All Industry Activity Index M/M Nov A 0.30% | C 0.40% | P -0.20%

09:30     GBP       Claimant Count Change Dec C -32.3K | P -36.7K

09:30     GBP       Claimant Count Rate Dec C 3.70% | P 3.80%

09:30     GBP       ILO Unemployment Rate (3M) Nov C 7.30% | P 7.40%

09:30     GBP       BoE Minutes C 0–0—9 | P 0–0–9

09:30     GBP       Public Sector Net Borrowing (GBP) Dec C 12.3B | P 14.8B

10:00     CHF        ZEW (Expectations) Jan P 39.4

15:00     CAD       BoC Rate Decision C 1.00% | P 1.00%

 

Harry Hindsight

  • EUR: A quiet day overall with the ZEW figures mixed but overall better than expected. Having weekend in early trading with EURJPY cross being sold at the start of Tokyo the Euro struggled to maintain its opening levels around the 1.3560 levels during Asia however, the market was reasonably quiet with most of the volume going through in the first few hours. The move into the grey hours saw the market creep higher with early buyers making an appearance and pushing the market back above the opening levels, but only just. London’s official opening saw a good number of sellers appear in the market and triggering some weak stops as the market dropped down below where the buying appeared just before the opening and left it struggling around the 1.3535 levels for several hours. The ZEW numbers did little to excite and the market again started to dip as we moved towards the NYK session with some reasonable two way flows around the 1.3517/18 lows before again resting in the 1.3535 levels. With little to help the Euro or the USD the market slowly moved back to the opening levels over the course of the NYK session with a busy period around the NYK option cut with demand for Euro’s taking it back to the 1.3565 area and that remained the top pretty much for the session as flows dropped off and we remained around the levels for the close.
  • GBP: The market was confined to a narrow range during the Asian session dipping in a steady move to just above the 1.6410 levels before moving higher as we moved to London; we topped out initially some 5 or 6 pips above the opening around the 1.6445 areas before dropping back on the London buying of USD’s on the opening to the 1.6410 areas. The market then ran between 1.6400 and 1.6450 in a choppy session before moving into the NYK session with a solid move higher to top above the 1.6480 level, the EURGBP was mostly behind the move with lows not seen since Jan 13 and the market bottomed around the 0.8215 levels before closing around 0.8230, having reached the highs the market slowed and held for the most part in a 1.6460-80 range for the remainder of the session going out just below the highs.
  • JPY: USDJPY moved quickly higher in early Tokyo trading moving from the opening 104.20 levels to push towards the 104.70 level however, even though the market continued to try and push higher the offers from that level through to 105.00 and beyond held the market in check. We moved into London just off the highs and immediately attempted to push higher, and continued trying into the NYK session. We failed the level for the third time and the market started to fall back as the NYK market supply increased dropping to below the opening levels and holding just above the 104.00 levels to recover for a close just in the positive. With tapering on everyone’s tongue in a quiet news day.
  • AUD: A reasonably flat day for the Oz, the market opened around the 0.8810 after a rise into the close in NYK which spilled over, with local players having the ball they were able to run the market initially to the 0.8825 level before some weak AUDJPY carry trade supply cam into the market. Tokyo opened and they bought anything against the Yen for the day and Oz again began to make headway moving to its highs just below the 0.8840 level and suspected offers around 0.8850 went left untouched. Early London players were strong sellers from the 0.8820 level with the belief that there is still room for a move lower however, the move was only to the 0.8780 level where some strong bids appeared in the market to hold there for several hours. NYK moved the market back above the 88cent area however, that was as far as the market could move and we held the 0.8810 opening areas into the close.

Yesterday’s premiership results

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

NZD       CPI Q/Q Q4 A 0.10% | C 0.00% | P 0.90%

EUR        German ZEW (Economic Sentiment) Jan A 61.7 | C 63 | P 62

EUR        German ZEW (Current Situation) Jan A 41.2 | C 34 | P 32.4

EUR        Eurozone ZEW (Economic Sentiment) Jan A 73.3 | C 70.2 | P 68.3

GBP       CBI Trends Total Orders Jan A -2 | C 12 | P 12

CAD       Wholesale Sales M/M Nov A 0.00% | C 0.60% | P 1.40%

CAD       Manufacturing Shipments M/M Nov A 1.00% | C 0.40% | P 1.00%
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.