Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 102.193 | EURUSD 1.3610 | EURJPY 139.087 | AUDUSD 0.93464 | NZDUSD 0.87516 | USDCAD 1.06349 | EURCHF 1.21576 | USDCHF 0.89326 | GBPUSD 1.71547 | EURGBP 0.79337 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.22 | 102.05

EUR/USD             1.3611 | 1.36015

EUR/JPY               139.11 | 138.89

AUD/USD            0.9365 | 0.9344

NZD/USD             0.8757 | 0.8742

USD/CAD             1.0644 | 1.0632

EUR/CHF              1.21595 | 1.2155

USD/CHF             0.89375 | 0.89315

GBP/USD             1.7174 | 1.7151

EUR/GBP             0.7935 | 0.7922

 

For today

EUR: Another day at the races with the market struggling in the Euro unable to move with EURGBP support close too and an unwillingness of the market to sell Cable, the Euro hangs on just above the 1.3600 level and its very unlikely to see fireworks with the US market closed for the day. Light offers now likely around the 1.3645/60 levels before giving way to stronger offers the closer you move to the 1.3700 levels, a break through the 1.3720 area will see weak stops in all likelihood before further offers move in. Downside has lighter bids than previously however, from here to the 1.3580/70 levels the market remains supported and even a break through the level will see shorts taking back positions to slow the market in a run to the next supportive areas around the 1.3520/00 areas.

GBP: Cable has moved slightly higher from the opening 1.7155 levels and continues to push for the 1.7200 levels in slow trading moving to 1.7175 in slow thin trading through the Asian session. For the moment light offers continue from here to 1.7200 before giving away to weak stops which are building above the level, the market from then on is a mixture and seems unclear of its direction, if I had to speculate then the market will continue to see fading into rallies but the rallies are likely to continue until there is news to sway the market as technically the topside is wide open to the 1.75 area. Downside sees bids towards the lows of yesterday nothing massive to change the markets mind on a concerted drop but sufficiently to slow a decent for today, add to which the likelihood of a dip through the 1.7100 levels meeting shorts buying back parts adds to those supports.

JPY: Light buying in the Oz market has helped to keep a lid on the USDJPY adding to the resistance to the 102.30 level and having made its way to the 102.20 levels into the close the market held into the opening with only a light fixing supply sending a little lower, since then the market has quietly moved to below the 102.10 levels and with very little support this side of the figure the market is unlikely to see much until 101.80 where bids are likely to be a little larger however, there is very little in the way of the 101.30 decent supportive level having been there done that over the past couple of weeks.

AUD: The Oz rises a little with carry trade buying been the better part of the market as the market settles in Ozland for the weekend and if anyone is watching. With the US out the likelihood of any major moves in FX is slim at best however, 0.9330 remains the support for the moment going back to the 93 cent level before light stops start to make an appearance. Topside having failed the 95 cent level one has to wonder whether we wait until next month before any movement reappears for a move higher however 0.9440 sees the first offers of any size with the market weak between here and that level, through there and weak stops will again give way to better offers in front of 95cent.

 

Overnight News

CNY/KRW:

PBOC Says Yuan Clearing Bank in Seoul to Be Determined Later

JPY: Japan’s Aso: Won’t Use Excess Tax Revenue for Corporate Tax Cut

Yamasaki named as Japan’s top financial diplomat

Japan picks Hosomizo as new chief financial regulator

Japan’s Kishida Says Too Soon to Resume 6-Party Talks: Kyodo

JPY/KRW/CNY:

Making History Into International Problem Not Helpful, Suga Says

AUD:

RBA’s Ellis Says Bar Should Be High for New Global Regulations

 

Today’s data

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

06:00     EUR        German Factory Orders M/M May C -0.80% | P 3.10%

 

Harry Hindsight

  • EUR: The Asian market slow drifted lower from the opening 1.3657 levels falling down to the 1.3645 level as the market moved into the London session, a slight rally was all the market saw with retail sales chasing the market lower having gained the 1.3665 levels and into the NYK session. With the US releases being broadly better than expected lower trade balance, better NFP the USD became the focus of attention and Euro’s dropped off to below the 1.3600 level before finding some support and holding the area into the close after a quiet end to the day as the US closes down for Independence Day.  I should mention the no change to rates by the ECB however; it was a little bit of a non-event.
  • GBP: Cable on the whole was a dull affair, moving from the opening 1.7165 areas the market never saw the highs again and drifted into London holding around the 1.7150 areas, a weaker PMI number than expected for services sent the Cable back to the 1.7140 levels and then slowly returned above the 1.7150 levels. The releases again sent the market lower and this time the market tested the 1.7100 level however, shorts were eager to cut some of their positions which had so far gone so wrong and the market stabilized and ran back to above the 1.7150 levels into the close in London. The market then died a little and held around the areas into the NYK close.
  • JPY: USDJPY continued its steady rise in the Asian session rising from the opening 101.78 areas to test above the 101.90’s again stalling mid-way through that level and not quiet getting to the 102.00 levels. The move into the NYK session saw the market moved higher pushing through the 102.00 level and pushing into the mid 102.20’s and the balance of the offers that have been sat pat for a while. Having made its way there the market died a death and remained in the areas to the close.
  • AUD: Again the Oz was the biggest mover of the day with a large swing to the negative side in Retail sales the market dropped quickly from the opening 0.9430 to test the minor support areas around 0.9380 dipping into London below 0.9370 but reluctant to test much beyond. NYK figures saw the market quickly gap lower to the 0.9340 levels and stronger support filling the gap in the market and moving quietly around the 0.9350 levels for the balance of the session as the market closed for most of the US as they prepare for the Independence day when the Empire chose to keep the nicer looking part of the Nth America.

 

Yesterday’s premiership results

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

AUD       Retail Sales M/M May A -0.50% | C 0.30% | P 0.20% | R -0.10%

AUD       Building Approvals M/M May A 9.90% | C 3.50% | P -5.60% | R -5.80%

EUR        Italian Services PMI Jun A 53.9 | C 52.3 | R 51.6

EUR        Eurozone Services PMI Jun (F) A 52.8 | C 52.8 | P 52.8

GBP       Services PMI Jun A 57.7 | C 58.1 | P 58.6

EUR        Eurozone Retail Sales M/M May  A 0.00% | C 0.30% | P 0.40% | R -0.20%

EUR        ECB Rate Decision A 0.15% | C 0.15% | P 0.15%

CAD       Trade Balance (CAD) May A -0.2B | C -0.3B | P -0.64B

USD       Trade Balance May A -44.4B | C -45.1B | P -$47.2B | R -47.04B

USD       Change in Non-farm Payrolls Jun A 288K | C 210K | P 217K | R 224K

USD       Unemployment Rate Jun A 6.10% | C 6.30% | R 6.30%

USD       Initial Jobless Claims (JUN 28) A 315K | C 310K | P 312K | R 313K

USD       ISM Non-Manufacturing Composite Jun A 56 | C 56.2 | P 56.3

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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