Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 101.936 | EURUSD 1.36459 | EURJPY 139.097 | AUDUSD 0.92384 | NZDUSD 0.85542 | USDCAD 1.0859 | EURCHF 1.22078 | USDCHF 0.89459 | GBPUSD 1.68421 | EURGBP 0.81024 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.99 | 101.885

EUR/USD             1.3669 | 1.3643

EUR/JPY               139.365 | 139.07

AUD/USD            0.9264 | 0.9235

NZD/USD             0.8580 | 0.8549

USD/CAD             1.0862 | 1.0840

EUR/CHF              1.2217 | 1.2209

USD/CHF             0.8951 | 0.89385

GBP/USD             1.6870 | 1.6838

EUR/GBP             0.81115 | 0.80975

 

For today

  • EUR: Opening around the 1.3645 it moved quietly into the Tokyo session, from there on cross JPY buying across the board saw the market move steadily over the next couple of hours to trade to just below the 1.3670 levels in good buying in the cross and triggering some reasonable speculative buying in the EURUSD pair. Once the market topped and failed to break any higher it turned back and has been drifting for the balance of the session back to the mid 1.3650’s. Light offers from the 1.3670 levels moving into the 1.3700 levels with some weak stops suspected above the 1.3820 levels before further offers start to appear. Downside has bids from the 1.3615 levels which the market seems to have rejected for the moment with stops through 1.3580 break. Light bids from then on into the mid 1.35’s.
  • GBP: Fixing demand for cross JPY saw the GBPJPY move quickly higher as USDJPY failed to move trapped by offers. Cable opened just below the 1.6845 levels and moved quietly into Tokyo before lifting quickly to trade just short of the 1.6870 levels, as with the Euro once it had pushed up there it struggled to move against the offers, attempting a couple of times over a greater period than the Euro before starting to drift lower as the session progressed. The market has offers from the highs working back to the 1.6900 with a light smattering of stops beyond, more offers build from the 1.6930 areas onwards with stronger offers towards the 1.7000. Downside now has light bids 1.6820 areas to the figure with weak stops through there.
  • JPY: USDJPY has been caught between a rock and a hard place, with good buying in the crosses against the JPY the market in those crosses has moved higher however, the USDJPY has remained firmly below 102.00 with only 1 minor dip below 101.90, so for the most part 10 pips covers it all. Offers as is blatantly obvious from the 102.00 levels to the 102.10 level before weak stops start to appear in the mix, onwards sees light offers going through to 102.50 with better offers to be seen again around the next handle of 103.00, mixed from the 102.50 level though. Downside sees light bids to the 101.80 level for the moment with weak stops suspected just below and again opening up the downside in the event of a failure at these levels. 101.00/100.80 remains stronger support area.
  • AUD: The Oz opened around the 0.9240 levels and seemed to be almost immediately bid and the catalyst for the cross buying against the Yen, with the Oz leg moving from pre-Tokyo to above the 0.9260 level in a steady move  into early Tokyo. Having pushed to just below the 0.9265 levels the market stalled and has hung around the 0.9255/60 levels for the balance of the session as the movement slowed down. Offers from the highs into the 0.9280 levels, with suspected weak stops and break stops above, the market becomes a little mixed from there until offers appear around the 0.9340 levels onwards. Stronger bids from the 0.9220 down to the 92cent areas with a likely congregation of stops below the 0.9190 levels and onwards however, technically it looks more as if the market is rejecting the 0.9215 areas having failed to push through all last week.

Overnight News

JPY:

LDP Tax Panel to Back Cutting Japan’s Corp. Tax Rate: Kyodo

Japan foreign assets hit record $3.2 trln as top creditor nation

Suga: Abe to Discuss Proactive Pacifism at Shangri-La Dialogue

JPY/THB:

Japan automakers unlikely to see big impact in Thailand-auto lobby head

CNY:

PBOC’s Zhou Reiterates Implementation of Prudent Monetary Policy

CNY/VND:

Chinese Ship Attacks, Sinks Vietnam Fishing Boat: Vietnam News

 

Today’s data

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

JPY         Corporate Service Price Y/Y Apr A 3.40% | C 3.30% | P 0.70%

06:00     CHF        Trade Balance (CHF) Apr C 2.43B | P 2.05B

08:30     GBP       BBA Loans for House Purchase Apr C 45.2K | P 45.9K

12:30     USD       Durable Goods Orders Apr C -0.50% | P 2.60%

12:30     USD       Durables Ex Transportation Apr C 0.20% | P 2.00%

13:00     USD       House Price Index M/M Mar C 0.50% | P 0.60%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Mar C 11.90% | P 12.86%

14:00     USD       Consumer Confidence May C 83.2 | P 82.3

 

Harry Hindsight

  • EUR: Asia was a quiet affair and more subdued than the coming London session, with both the US and UK out the market drifted in Asia, moving from the opening 1.3625/28 areas the market limped along before some light cross Euro selling appeared each time a European sceptic party was mentioned winning multiple seats however, with a lack of focus in the market it was unable to push much further than the upper teens and held for the most part just below 1.3620 for the session, while the day saw several commentaries from the ECB faithful, what market watching was more focused on the European election, and the rest like the UK and US were not around to listen so reactions were muted at best. Europeans bought the Euro early on into the London period pushing it to the 1.3645 levels before the market stalled and then a follow through of sorts with NYK taking it to the 1.3655 levels as Draghi’s expected hurry up and wait speech kicked off with the usual platitudes and nothing of substance. The market eventually trickled out around the 1.3645 levels in quieter trading than normal.
  • GBP: Cable was obviously dead in the water with limited movement throughout the Asian session with the market opening around the 1.6830 levels and barely breaking above the 1.6835 level later into the session with grey hour buyers and a push to the 1.6845 levels, from there the market moved for the most part around those levels for the whole session with a slight dip into the NYK opening.
  • JPY: Without the London/NYK markets the USDJPY was unable to progress running from the opening 101.95 area into good supply above the 102.00 levels the market stalled on its one and only attempt to break higher from the Tokyo fix onwards, the lack of impetus set the market back to the 101.90 areas and the rest of the day was then spent moving around the 101.90 levels in slow trading.
  • AUD: A slow move higher over the course of the day rising from the opening 0.9235 levels to peak just below 0.9250 level before settling back around the 0.9240 into the close of a quiet day.

Yesterday’s premiership results

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

NZD       Trade Balance (NZD) Apr A 534M | C 636M | P 920M | R 935M

EUR        GfK German Consumer Sentiment Jun A 8.5 | C 8.5 | P 8.5

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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