Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 101.644 | EURUSD 1.35177 | EURJPY 137.41 | AUDUSD 0.89253 | NZDUSD 0.82088 | USDCAD 1.10828 | EURCHF 1.22166 | USDCHF 0.90379 | GBPUSD 1.63257 | EURGBP 0.82805 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.77 | 101.235

EUR/USD             1.35275 | 1.35085

EUR/JPY               137.55 | 136.88

AUD/USD            0.8930 | 0.8873

NZD/USD             0.8251 | 0.8187

USD/CAD             1.1098 | 1.1076

EUR/CHF              1.2220 | 1.2211

USD/CHF             0.9042 | 0.9031

GBP/USD             1.6342 | 1.6323

EUR/GBP             0.82805 | 0.8269

 

For today

  • EUR: A quiet opening led the market sideways into the Tokyo session from the 1.3515 levels, Tokyo saw demand for the EURJPY and this led to the Euro making its highs above the 1.3527 areas before drifting lower after the demand disappeared. The market dropped to below the 1.3510 area and we’ve barely moved from those opening levels in tight range with reasonable volumes. Weak stops make an appearance just above yesterday’s highs with range players sitting on the offer a move through 1.3580 sees some decent offers appear with stops immediately behind the 1.3600. The downside is a similar pattern with stops below 1.3500 and bids appearing around the 1.3480 level from range players however, the bids are then constant down through the mid 1.3400’s strengthening the closer you get to 1.3400.
  • GBP: Cable opened around the 1.6330 levels with some early buying into the Tokyo market as demand for crosses moved it to the 1.6340 area, once demand disappeared the market has been holding for the most part with a minor dip to the mid 1.6320’s into mid-session, EURGBP drifted lower from the 0.8280’s for a 10 pip move and has kept the Euro on its lows while pushing the Cable back above the 1.6340 level where we are currently holding. Similar to yesterday with bids lined up by tech players and now range players around the key 1.6250 area with suspected stops below the 1.6230/40 area. Topside sees light offers from the 1.6350 area and some light stops around 1.6380 but nothing special.
  • JPY: The USDJPY came off from the Tokyo opening having opened around the 101.65 area we topped just short of 101.80 in pre-Tokyo and then to prove me wrong was sold from then on pushing to the 101.50 area and then another leg lower to base just below the 101.30 levels. Volumes have been reasonable in what appears to be a two way battle with retail on the buy side. Offers make an appearance just above the highs to around the 102.00 however, they are not large and a push through sees better size sitting with the market thinning through the 102.40 levels until above 102.80-103.00 again better offers with relevant stops behind. Weak stops through the 101.00/20 areas some small bids holding the market for the moment. A break through 100.80 again triggers weak stops and nothing major until we get closer to 100 where some barriers are seen and larger bids.
  • AUD: A lacklustre day with some light AUDJPY selling appearing in the session, NZD numbers saw the AUDNZD cross sold from the opening and the market dipped from the 0.8930 area opening to the 0.8910 levels before holding into the Tokyo session, the move lower continued as the euphoria from yesterday’s revelations pass from the mind and the market moved to below the 89cent level to touch into the mid 0.8870’s before holding around the 0.8890 levels as interest waned. With weak stops above the 0.8940 area the market is open for a fresh attempt at 90cents however, the market feels heavy again and a break through the lows sees light sell stops with only some mixed action between there and the 88cent levels where the market broke up from yesterday.

Overnight News

JPY:

Japan Dec wages rise year-on-year for 2nd straight month

Suga: Good If Base Wages, Pay Rises in Japan Spring Wage Talks

NZD:

NZ Unemployment Rate Hits Lowest Level since Mid-2009

GBP:

UK retailers cut prices at fastest pace since at least 2006 -BRC
Today’s data

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

NZD       Unemployment Rate Q4 A 6.00% |C 6.00% | P 6.20%

NZD       Employment Change Q/Q Q4 A 1.10% | C 0.60% | P 1.20%

GBP       BRC Shop Price Index Y/Y Jan A -1.00% | P -0.80%

08:45     EUR        Italian PMI Services Jan C 48.6 | P 47.9

09:00     EUR        Eurozone PMI Services Jan (F) C 51.9 | P 51.9

09:00     EUR        Eurozone PMI Composite Jan (F) C 53.2 | P 53.2

09:30     GBP       PMI Services Jan C 59 | P 58.8

10:00     EUR        Eurozone Retail Sales M/M Dec C 1.50% | P 1.40%

13:15     USD       ADP Employment Change Jan C 195K | P 238K

13:30     CAD       Building Permits M/M Dec C 2.50% | P -6.70%

15:00     USD       ISM Non-Manufacturing Composite Jan C 53.9 | P 53

15:30     USD       Crude Oil Inventories P 6.4M

Harry Hindsight

  • EUR: Asia sold the Euro over the session in a tight channel from the opening 1.3530 areas down to the 1.3505 in reasonable volumes. The move into the grey hours saw some quick buying generated from Middle East and early Europeans taking the market quickly to just below the 1.3540 areas to set the highs for the day. The market then held in the area into the official London open where profit taking in EURGBP kicked in quickly changing the direction of the Euro and for once the Euro was the weak link and dropped to the 1.3495 levels squeezing out the original buyers to set the low for the day, the remainder of the day. The market slowly regained the opening levels into the NYK opening with the Eurozone numbers being a drab affair, the range didn’t improve and the release of the US numbers had little effect on the day with the Euro dropping back below 1.3500 before rising into a close around the 1.3515 areas.
  • GBP: GBP struggled in Asia as a weak set of bids and a key level close at hand led the market lower from the opening 1.6310 areas, drifting sideways in the early part of the session the market started to drift lower once the market thinned out for Tokyo lunch, dropping below the 1.6300 level and pushing to the 1.6290 area. Grey hours selling livened the market a little as early Europeans sold into limited bids pushing the market to 1.6260 areas however, the bids remaining were enough to frighten the sellers and we bounced back to 1.6280 and then moved in a tight channel to the 1.6300 area for the number which came in above expectations and a short squeeze occurred taking the market quickly to above 1.6340. The market struggled above those levels and couldn’t make any more headway before the NYK open and drifted a little in the early part before holding for several hours into the close above the 1.6320 levels.
  • JPY: So buy from the opening and dump it midway through the session seems to be the name of the game, the market opened around the 101.00 levels and moved steadily higher into the Tokyo session and moved above the 101.30 area trading down from that level for several hours before the grey hours hit the market with cross selling against the Yen, the market quickly dropped to below the 100.80 levels before finding some support and moving steadily away from the lows to make it to the 101.50 levels before we reached NYK. USD buying albeit slowly seemed to be the name of the game and although the volumes were solid from the opening into the London the numbers started to drop off as the market slowly grinded higher pushing to just below the 101.70 levels into the close.
  • AUD: Oz opened around the 0.8750 area and dipped to make the lows around the 0.8730 levels as early players either cut positions or gambled on no change with similar comments to previous. On the release this proved to be incorrect with a shift in tone to neutral leading the market to assume that a hike is closer now than it was, to be honest the last cut was to weaken the currency in the face of rampant carry trade buying, so nothing is ever certain. The market quickly rallied to above the 0.8840 clearing what offers remained in the market, the ascent from here was a little slower and moving into the grey hours we again moved to above the 89cent level before holding around the level into London and ultimately NYK. There was a little buying on the NYK option cut and the market made its highs shortly after touching above the 0.8940 levels and holding into the close keeping the gains with only limited profit taking entering the market.

Yesterday’s premiership results

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

JPY         Monetary Base Y/Y Jan A 51.90% | C 47.20% | P 46.60%

AUD       RBA Rate Decision A 2.50% | C 2.50% | P 2.50%

GBP       PMI Construction Jan A 64.6 | C 61.6 | P 62.1

EUR        Eurozone PPI M/M Dec A 0.20% | C 0.10% | P -0.10%

EUR        Eurozone PPI Y/Y Dec A -0.80% | C -0.90% | P -1.20%

USD       Factory Orders Dec A -1.50% | C 0.70% | P 1.80%
Good Luck

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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