Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 102.56 | EURUSD 1.36731 | EURJPY 140.219 | AUDUSD 0.87394 | NZDUSD 0.82254 | USDCAD 1.11141 | EURCHF 1.22563 | USDCHF 0.89628 | GBPUSD 1.65841 | EURGBP 0.82448 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.76 | 102.49

EUR/USD             1.36835 | 1.3666

EUR/JPY               140.59 | 140.21

AUD/USD            0.8793 | 0.8727

NZD/USD             0.8276 | 0.8221

USD/CAD             1.1120 | 1.1095

EUR/CHF              1.2261 | 1.2250

USD/CHF             0.8971 | 0.8957

GBP/USD             1.6618 | 1.6571

EUR/GBP             0.8251 | 0.8232

 

For today

  • EUR: While volumes have not been particularly slow the Euro has been trading for the most part between the 1.3670/80 levels with a brief move lower to the upper 60’s and currently off its highs around the 1.3683 level. Some light offers now from here until the other side of 1.3700 then more building to the next sentimental value around 1.3750 before we start to see the first set of stops appearing but with larger offers hanging around in front of 1.3800 its likely to be contained unless something dramatic. Light bids all the way down with no real stops making an appearance on the 1.3600 handle and you would probably have to look sub 1.3580.
  • GBP: EURGBP selling continues from one particular corner, the Cable started quietly with the market drifting from the 1.6580 levels to post the lows in early Tokyo around the 1.6570 area before the Cable started to rise, there was a short period before the Euro leg impacted however, it was clearly EURGBP going through by the individual legs, not the smartest move however, once the Cable started to move to the 1.6590 area the market moved quickly through 1.6600 and stopped around the 1.6610 levels where we currently hold.
  • JPY: The USDJPY has remained in a reasonably tight range if somewhat choppy considering volumes have been surprisingly good. Moving from the opening we made the lows just below the 102.50 levels before slowly moving higher into the Tokyo opening, from that point on we’ve seen the market moving between the 102.50/75 levels on several occasions as different players appear in the market. With comments from EconMin keeping the market buoyant I believe and holding around the 102.60’s as we move into the London period. With light offers protecting the 103.00 area the market may be tempted however, after moving through that level the offers start to thicken as you move through the 103.25 areas and no real stops are showing above that region for the moment. Downside seems to be a similar set up with light bids falling to the 102.00 a push through this level will see weak stops vulnerable until support makes an appearance from the 101.80 level down to around the 101.50.
  • AUD: The Oz struggled again on its own time before the Tokyo market came in to lift it off the lows and run it to close to the 0.8770 levels quickly with AUDJPY buying being the main impetus to the rise, from there we marked time for several hours before comments from English helped the market move another leg up to the 0.8790 levels briefly before slipping back to the 0.8770 levels. With the current levels the market has taken out the weak stops on the topside and a break through 88cents will see a second round as sentimentalists stick to the norm, from there its light offers thickening to the 89cent levels. Downside sees some light stops below the lows of the day but with growing support below the 87cent area the downside suddenly looks limited.

Overnight News

JPY:

Japan EconMin: trade deficit could widen further given forex moves

Aso: Must Consider Fiscal Situation When Discussing Corp Tax Cut

Honda becomes first Japan automaker to be net exporter from US

Abe Says He’ll Seek Other Nations’ Understanding on Shrine Visit

AUD/NZD:

English Concerned by N.Z. Dollar Strength Against Aussie: Stuff

AUD:

Australia Business Conditions Improve, Confidence Still Strong

NZD:

Key Says New Zealand Government Will Responsibly Manage Finances

CNY:

China SAFE’s Chief Investment Officer Zhu Resigns: Business News
Today’s data

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

JPY         CSPI Y/Y Dec A 1.30% | C 1.10% | P 1.00% | R 1.20%

AUD       NAB Business Confidence Dec A 6 | P 5 | R 6

09:30     GBP       GDP Q/Q Q4 (A) C 0.80% | P 0.80%

09:30     GBP       Index of Services 3M/3M Nov C 0.70% | P 0.80%

13:30     USD       Durable Goods Orders Dec C 1.00% | P 3.50%

13:30     USD       Durables Ex Transportation Dec C 0.70% | P 1.20%

14:00     USD       S&P/Case-Shiller Composite-20 Y/Y Nov C 13.70% | P 13.60%

15:00     USD       Consumer Confidence Jan C 80 | P 78.1

 

Harry Hindsight

  • EUR: An almost replica day to Friday including the volumes. The day started slowly with early buyers of anything against the Yen as some of the retail players came into the market to reset positions, the market then stalled around the 1.3690 levels from the 1.3680 openings before drifting sideways for the rest of the session into the London session. With several little news items over the weekend to indicate that Greece has not gone away and therefore neither has the crisis the market found it difficult to move higher than Friday, in fact even with the good IFO numbers the market remained capped at the 1.3720 levels and was soon moving away from the highs and trading into the NYK session to a low in the mid 1.3650’s before recovering a little and finishing the day in the low 1.3670’s.
  • GBP: Cable did very little in Asia dipping in early trading to the 1.6480 levels before finding its legs into Tokyo and rising slowly into the grey hours above the 1.6510 levels with EURGBP beginning to wilt. With the will me won’t me scotched for the moment with a definite maybe the market rose slowly recoupling some of Friday’s losses with EURGBP selling from real money benefiting the Cable. The market in London rose to above 1.6530 before the cross selling increased dramatically allowing Cable to push to the 1.6570 levels where there was a tussle going into the NYK session, the market stalled for a while before again pushing on into the session and moving to play around the 1.6580 levels for the rest of the session and unable to break back above the 1.6600 level.
  • JPY: A combination of things on Friday set the USDJPY falling out of bed and triggering retail stops and margin calls, Sunday start was the opposite once the opening was out of the way. The opening was below the 102.00 level close to the 101.70 areas as untouched stops were triggered from the opening and the market moved off those levels as confidence in the market reasserted itself and the retail players started to buy back their positions. The move into Tokyo saw the gap on the charts filled within the first hour and the market topping above the 102.40 levels. Although there was a minor setback around the fix the market continued a tight channelled rise to above the 102.50 levels before London opened. London sent the pair lower again for those that missed the Friday move one assumes before turning smartly from the opening levels and pushing above the 102.90 levels and falling back from there, again early NYK sold and again the closing levels from Friday held and the day finished with the market holding into the 102.60 levels for a recovery of sorts.
  • AUD: With an awful lot of the retail players turned out on Friday and at the start of the session once the low USDJPY opening was out of the way AUDJPY started to climb with USDJPY move up AUD found itself with no selling pressure to stop it also rising modestly with the USDJPY rise. Moving from the opening 0.8690 it only briefly flirted with the lows around 0.8678 before rising in Tokyo to just short of 0.8740 and then trading between 0.8740/50 into the close, although not a big day the market overall was fairly buoyant and plenty of trades changing hands.

Yesterday’s premiership results

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

JPY         Trade Balance (JPY) Dec A -1.15T | C -1.33T | P -1.35T | R -1.29T

EUR        German IFO – Business Climate Jan A 110.6 | C 110 | P 109.5

EUR        German IFO – Current Assessment Jan A 112.4 | C 112.2 | P 111.6

EUR        German IFO – Expectations Jan A 108.9 | C 108 | P 107.4

USD       New Home Sales Dec A 414K | C 458K | P 464K
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.