Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 102.085 102.00-09 | EURUSD 1.35946 1.3595-1.3600 | EURJPY 138.792 138.67-138.84 | AUDUSD 0.93648 0.9360-74 | NZDUSD 0.87432 0.8740-53 | USDCAD 1.06519 1.0642-60 | EURCHF 1.21583 1.2156-63 | USDCHF 0.89429 0.8936-53 | GBPUSD 1.7159 1.7152-70 | EURGBP 0.79226 0.7918-30 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.21 | 102.03

EUR/USD             1.3603 | 1.35805

EUR/JPY               138.82 | 138.705

AUD/USD            0.9374 | 0.9342

NZD/USD             0.8750 | 0.8714

USD/CAD             1.0667 | 1.0649

EUR/CHF              1.21645 | 1.2158

USD/CHF             0.89565 | 0.8941

GBP/USD             1.7172 | 1.7136

EUR/GBP             0.7926 | 0.7920

 

For today

  • EUR: The Euro slowly sank to the immediate support level from the opening in a quiet session moving from the opening levels to just above the 1.3580 levels, having reached there the market has levelled out on the 1.3585 area. Bids remain at the current levels with light stops through 1.3570 before running into further bids 1.3530/00 levels. Topside offers are light through to 1.3660 with better offers around the 1.3700 levels again.
  • GBP: Cable opened slightly higher from the opening before drifting through the session from the 1.7165 level to below 1.7140 in light trading and EURGBP buying from support just below 0.7920. The market holds just above the lows now as we move into the London grey hours. A break above the 1.7180 levels sees some light offers leading to weak stops above the 1.7200 level and then a mixture from then on with no clear definition in the market. Downside has light bids forming around the 1.7100 level however, the downside while fundamentally looking strong market wise is weak with only light mixtures on the way to 1.7000.
  • JPY: Weekend comments caused some strengthening of the USD with USDJPY rising from the levels from Fridays close to touch in early trading above the 102.20 level before slowly sliding back into the mid-teens as we head towards London. Volumes for the day have been below expectations. For the moment offers remain 102.30 levels with a break through this level opening the market to the 102.60 levels with a mix of light stops along the way. !02.80-103.00 likely to have stronger offers and the will be a bit of a struggle to move beyond there without some good news items. Downside sees light buying through the 102.00 level and too the 101.80 levels before giving way to a mixture to 101.60. Better support doesn’t really appear until the 101.00/100.80 areas with only a light mix in front of the levels.
  • AUD: The Oz showed a little bit of movement dropping back from the opening 0.9365 areas to below 0.9345 on light selling as USD rallied from the opening only to retrace in the second half of the session in quiet trading more driven by cross trading than outright. Light offers to the topside above 0.9370 to the 94 cent level with very little likely over the following 100 pips until 0.9500 areas. Downside has bids from the 0.9330 level down through 93 cent with stops likely below 0.9270.

Overnight News

JPY:

Kuroda: Bank of Japan to Keep Easing Until 2% Inflation Stable

BOJ maintains assessment for all 9 regions of Japan

Suga: Japan to Spend a Year Debating Collective Defence Bills

USD:

Stiglitz: U.S. Joblessness Falling Mainly as Fewer Seeking Work

CNY/EUR:

China to give 80 bln yuan of RQFII quota to Germany

CNY:

China’s Leader Xi Says Won’t Allow Countries to Deny War History

NZD:

New Zealand June House-Price Inflation Is Slowest in a Year

 

Today’s data

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

JPY         Leading Index May (P) A 105.7 | C 105.9 | P 106.5

05:45     CHF        Unemployment Rate Jun C 3.20% | P 3.20%

06:00     EUR        German Industrial Production M/M May C 0.00% | P 0.20%

07:00     CHF        Foreign Currency Reserves Jun C 445.0B | P 444.4B

08:30     EUR        Eurozone Sentix Investor Confidence Jul C 7.8 | P 8.5

12:30     CAD       Building Permits M/M May C 3.00% | P 1.10%

14:00     CAD       Ivey Purchasing Managers Index S.A. Jun C 52.5 | P 48.2

14:30     CAD       BoC Business Outlook Survey

 

Weekend News

IMF:

IMF Sees U.S. Growth Accelerating, Europe Growth ‘Inadequate’
EUR:

ECB to Keep Interest Rates Near Zero for Very Long Time: Coeure
Coeure: ECB Needs to Mull ‘All Possibilities’ to Reach 2% CPI
Lautenschlaeger Sees No Need for ECB to Buy Govt Bonds: FAS
France Says Increasing Euro Use Is Issue of ‘Global Balance’
Finance Goes From Foe to Friend in Hollande Government
Fitch Affirms European Financial Stability Facility at ‘AA+’
JPY/Asia:

Asian Consumers Increasingly Seek Japan ‘Brand’ Items: Nikkei
JPY:

Japan to Allow Arms Export Under New Guidelines: Nikkei
Abe Plans Cabinet Post on Japan’s Wider Defence Role: Yomiuri
JPY: Japan Utilities to Boost Nuclear Plant Safety Budgets: Mainichi
Japan to Raise Australia, Papua New Guinea Gas Imports: Yomiuri
JPY/Asia/GBP:

NTT to Open Data Centres in Southeast Asia, U.K: Nikkei
UAH/RUB:

Ukraine Pledges Continued Offensive After Rebel Stronghold Falls
CHF:

SNB’s Zurbruegg Says Timing of Exit From Low Rates ‘Difficult’
CNY:

Corruption Crackdown Helps Xi Position to Shape Future Leaders
CNY: PBOC Adviser Song: Property Drop to Affect Economy in Short Term
USD/CNY/JPY:

Russel Says China, Japan Should Hold Talks on Island Row: Asahi

 

Harry Hindsight

  • EUR: With Independence in the offing the market throughout the day was slow at the best of times, the market moved quietly through Asia with less than a 10 pip range moving around the 1.3605 levels and into slight selling pressure into the grey hours before London. A slight break below the 1.3600 level on another drop in factory orders in Germany had limited impact dropping into the London session properly to below 1.3590 and trading that level for several hours and finishing the day around the 1.3595 levels.
  • GBP: Asia saw light EURGBP selling and some slight buying in Cable in a very light market, Asia took the market to the 1.7180 levels before giving up into the grey hours. Early London started to sell the market back as offers weighted on the market above the 1.7180 area and what day traders were around sent the market lower dropping down and through the 1.7150 level and trading to just above the 1.7130 levels. Buying in mid-session managed to recover the losses and the market made its way back through the opening 1.7155 levels to finish the day only slightly above those levels.
  • JPY: USDJPY without the US playing struggled to maintain its attempts to move beyond the resistance level of 102.30 and started to dip as the market off loaded the longs it was holding into the weekend, nothing large however, it was sufficient to push the market steadily lower to the 102.00 level and London took it through the level before moving back to 102.05 and trading around that level into the close.
  • AUD: With USDJPY in retreat over the Asian session the AUD had room to move slightly higher as AUDJPY maintained its levels, Oz rose from the 0.9345/50 area and pushed to above the 0.9365 levels before slipping back to the 0.9355 levels for a good portion of the day. The market rose towards the end of the day as leverage sellers cut out there shorts taking the market back to the highs into the close on light trading.

 

Friday’s premiership results

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

EUR        German Factory Orders M/M May A -1.70% | C -0.80% | P 3.10% | R 3.40%

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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