Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 101.974 | EURUSD 1.36349 | EURJPY 139.039 | AUDUSD 0.92612 | NZDUSD 0.85447 | USDCAD 1.08587 | EURCHF 1.22268 | USDCHF 0.89672 | GBPUSD 1.6810 | EURGBP 0.81112 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.03 | 101.88

EUR/USD             1.3638 | 1.3627

EUR/JPY               139.10 | 138.88

AUD/USD            0.9269 | 0.9250

NZD/USD             0.8572 | 0.8534

USD/CAD             1.0864 | 1.0852

EUR/CHF              1.22295 | 1.22255

USD/CHF             0.89735 | 0.8966

GBP/USD             1.6816 | 1.6806

EUR/GBP             0.81125 | 0.81075

 

For today

  • EUR: Another dull day in the heady financial markets of the world, the Euro opened around the 1.3635 levels and struggled along in a less than 10 pip range, dipping in early Tokyo as fixing supply in cross JPY forced the Euro lower to the upper 1.3620’s, once the fix was out of the way the market held around the 1.3635 in a very quiet market. Bids still remain in the market from the 1.3615 levels down into the 1.3590 areas before weak stops start to appear. With congestion continuing through the next big figure stops dominate through 1.3580 but bids thicken the lower you go. Technically the market is calling a continuing drift lower in choppy markets, choppy markets would be nice in any direction however, has the supposed June easing by the ECB now adjusted for in the market? The risk now seems to be to the topside if that easing does not materialize. Light offers to the 1.3650 area before becoming patchy 1.3670/1.3700 remains more of an offer area with likely stronger numbers for the short term. Light stops through 1.3720 likely to increase if we do test the 1.3700 levels.
  • GBP: No different to the Euro really holding around the 1.6810 levels for the whole session barely covering a 5 pip range. Bids appear from 1.6780 levels however, the bids are limited and EURGBP cross is likely to strengthen now the M&A has been removed. A move through the 1.6740 opens up a deeper move with 1.6740 seeing similar pattern of weak support into the 1.6700 levels where suspected stronger bids appear. Light offers into the 1.6850 level are likely to be growing as the market approaches 1.6900, stops thin on the ground.
  • JPY: The market moved down from the 102.00 levels but the selling was limited and centred more on the Tokyo fix. Dipping to below the 101.90 before rising to mid-range. Offers still appear from the 102.10 levels moving back to around 102.40 before stops start to appear in a weak market, chances are if we get that far the market will have exhausted itself and little impetus left. Downside has bids now through 101.80 into lights stops below 101.60 and better support 100.80/101.00.
  • AUD: As with the rest of the market nothing going on, moving around the 0.9260 levels and holding pretty much in place with a variation of 10 pips roughly either side of the level. With commodity markets falling yesterday the Oz is vulnerable to a stronger USD. Offers from yesterday’s highs into the 93 cent level with weak stops above 0.9310 and then stronger offers going all the way back. Downside sees some support to the 92 cent level before stops start to appear below the level in a mixed market.

Overnight News

CNY:

China May Loosen Monetary Policy in ‘Some Areas:’ Sec. Journal

China Warns Banks on LGFV Debt Risks, Securities News Says

JPY:

Aso: Can’t Postpone Reaching Japan Primary Balance Surplus

USD:

Lockhart Sees Fed Raising Main Interest Rate in Second Half 2015

NZD:

New Zealand Business Confidence Falls

AUD:

Australia opposition leader expects mining, carbon taxes to be repealed

 

Today’s data

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

AUD       Westpac Leading Index M/M Apr A -0.50% | P 0.00%

05:45     CHF        GDP Q/Q Q1 C 0.60% | P 0.20%

06:00     CHF        UBS Consumption Indicator Apr P 1.84

07:55     EUR        German Unemployment Change May C -14K | P -25K

07:55     EUR        German Unemployment Rate May C 6.70% | P 6.70%

08:00     EUR        Eurozone M3 Y/Y Apr C 1.20% | P 1.10%

09:00     EUR        Eurozone Economic Confidence May C 102.2 | P 102

09:00     EUR        Eurozone Industrial Confidence May C -4 | P -3.6

09:00     EUR        Eurozone Consumer Confidence May (F) C -7.1 | P -8.6

09:00     EUR        Eurozone Services Confidence May C 3.5 | P 3.5

09:00     EUR        Eurozone Business Climate Indicator May C 0.35 | P 0.27

10:00     GBP       CBI Reported Sales May C 36 | P 30

 

Harry Hindsight

  • EUR: After a quiet Sydney start strong cross buying against the JPY set the tone in early Tokyo with carry trades leading the way. Euro’s moved from the opening 1.3645 levels and moved quickly to just short of the 1.3670 levels before the demand petered out and the market slowly declined into the London session retracing to the opening levels. London seemed reluctant to argue and although there was a brief attempt higher just before NYK it was unable to move through the 1.3660 levels on the second attempt. An unexpected rise in durable goods orders in the US put paid to any further rallies to the highs and the market dropped back to trade on the supporting 1.3615 levels and maybe yesterday’s comments about rejecting the level was a little premature. The support held and the market saw some profit taking appear in the market as the market in London closed, lifting the Euro to the 1.3635 levels to hold into the close.
  • GBP: Good cross JPY buying led the Cable higher in Tokyo, moving from the opening levels of 1.6840 to the 1.6860/70 area where the market traded for the bulk of the Asian session. The move into London saw light buying to the 1.6880 levels and into London, according to the market a weak home loan number sent the Cable lower and moving to below the 1.6820 levels before holding on light support. The move for me was an excuse as the supportive nature of the Pfizer/AstraZeneca bid which finally came to an end. With light EURGBP buying entering the market and firmly placing it above the 0.8100 level. A decent set of US numbers sent the USD higher and Cable broke lower and moved down through the 1.6800 levels touching just below 1.6790 before bouncing back to the 1.6810 levels into the closing stages.
  • JPY: The JPY caused most of the movement in the markets as USDJPY offers remained solid around the 102.00 levels squeezing the other legs higher as players switched to cross Yen. USDJPY still failed to move through 102.00 as the crosses rose strongly led higher by the carry trades most notably AUDJPY. Once the market moved into the grey hours early traders started to fade the strength and the USDJPY started to dip lower falling into the early London session to 101.75 levels. The market bounced as the end of Tokyo saw fresh Yen selling forcing the market back to the resistance levels. Having matched the opening levels above the 101.90 area the market held quietly into the NYK session and the US numbers release, better numbers drove buyers through rumoured fund profit taking or liquidation of long positions as they readjust there exposure. The market pushed above the 102.10 before again running out of steam. The market did keep to the highs struggling over the course of a few hours before dropping quickly as the market saw renewed interest from the funds, holding into the close around 102.00.
  • AUD: A tight choppy day for the Oz with initial buying in AUDJPY carry moving the market higher from the opening 0.9240 to just below 0.9265 in the first couple of hours helping the other majors higher as the USDJPY held its levels, having reached the initial highs the market was reasonably well bid but unable to move any further until the grey hours where some fresh buying moved in to trade above the 0.9275 levels, the spike over with the market dropped back 20 pips and the market held into the NYK data. Good US numbers saw the market move another 20 pips touching below 0.9235 and moving back to the 0.9260 quickly, the close was a quiet affair with short term players taking profit in a thinning market.

Yesterday’s premiership results

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%

CHF        Trade Balance (CHF) Apr A 2.43B | C 2.43B | P 2.05B | R 2.00B

GBP       BBA Loans for House Purchase Apr A 42.2K | C 45.2K | P 45.9K | R 45.0K

USD       Durable Goods Orders Apr A 0.80% | C -0.50% | P 2.60% | R 2.90%

USD       Durables Ex Transportation Apr A 0.10% | C 0.20% | P 2.00% | R 2.40%

USD       House Price Index M/M Mar A 0.70% | C 0.50% | P 0.60%

USD       S&P/Case-Shiller Composite-20 Y/Y Mar A 12.40% | C 11.90% | P 12.86%

USD       Consumer Confidence May A 83 | C 83.2 | P 82.3 | R 81.7

 

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.