Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 101.344 | EURUSD 1.36087 | EURJPY 137.915 | AUDUSD 0.93948 | NZDUSD 0.88237 | USDCAD 1.06492 | EURCHF 1.2143 | USDCHF 0.89229 | GBPUSD 1.71327 | EURGBP 0.79434 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.39 | 101.215

EUR/USD             1.3609 | 1.3596

EUR/JPY               137.90 | 137.685

AUD/USD            0.9395 | 0.9377

NZD/USD             0.8821 | 0.8804

USD/CAD             1.0654 | 1.0636

EUR/CHF              1.2147 | 1.2143

USD/CHF             0.8933 | 0.89245

GBP/USD             1.7135 | 1.7120

EUR/GBP             0.7944 | 0.79385

 

For today

  • EUR: Euro’s drifted from the opening levels just below 1.3610 to trade towards the 1.3595 levels before beginning a recovery late into Asia as the USDJPY started to drift giving the Euro’s limited space to the topside. Immediate support to the downside running to 1.3580 areas and a break through the 1.3570 levels will likely see weak stops triggered and the market opening up for a test of 1.3520 areas and a f the years lows below there, especially if the Portuguese banking problems escalate. Topside has its own set of worries also with some longer term players moving in on the break below 1.3600 yesterday leaving themselves exposed to a potential short squeeze, for the moment offers are likely around the 1.3650 area and weak stops above may be a distinct possibility before better offers appear from 1.3670 onwards.
  • GBP: With GBP shine a little tainted from this week’s numbers the market struggles to see beyond those numbers and looks for direction, this is likely to come from the Euro to a greater extent with no real data for the day, The market opened around the 1.7135 areas and drifted in the early part of Asia testing towards the 1.7120 area before holding just short of the opening levels in a lacklustre day’s trading, Topside is still capped by the 1.7170 levels although the offers are likely to be thinner than previously given the selling yesterday, weak stops through the 1.7210/20 area from leveraged shorts if we were to head in that direction and the market opening up for another leg higher. Downside sees light support 1.7100 to around the 1.7070 levels before light mixtures start to dominate the market, with 1.7050 providing the next level of support and a congested area from then to 1.6950.
  • JPY: USDJPY struggled to make any particular moves in either direction moving around the 101.30 levels having opened only just above the levels, brief cross JPY buying came to market and set the highs just short of the 101.40 levels but the market has since drifted into the 101.25 levels and seems lacking for the moment. Downside bids still support the market down to around the 100.80 level with stops likely to appear only briefly and into the lows of the year supportive area. Above the market offers around the 101.40 area are light with a mixture through 101.50 on any concerted effort higher; again this would depend on any news out of Europe to move EURJPY.
  • AUD: The Oz has done very little with some light AUDJPY carry trade buying after yesterday’s moves lower post fix in Tokyo moving from the lows of 0.9380 back to the opening areas above 0.9390 on a very quiet day for the pair. Downside support seen running from the 0.9360 levels to 0.9340 a clear break there opens the congested area around the 93 cent level with weak stops likely below, Topside offers remain above 94 cent running to 0.9440 before opening up to the topside resistance level around 95 cent.

 

Overnight News

JPY:

GPIF-Picked Manager Doubting Abe Moves to Japan Bond Fund Top

Japan Investment Trust Assets Rise to Record, Nikkei Reports

Japan’s Amari: PM Abe wants to conclude TPP trade talks by year end

Japan FinMin Aso: Japan long-term rates are abnormally low

Japan’s Amari says premature for BOJ to mull QE exit

USD:

Fed Considers Redefining Main Federal Funds Target Rate: FT

AUD:

Australian Mortgage Lending Unchanged in May

NZD:

N.Z. June Residential Property Listings Fall 20% M/M

 

Today’s data

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

AUD       Home Loans May A 0.00%| C -0.50% | P 0.00%

06:00     EUR        German CPI M/M Jun (F) C 0.30% | P 0.30%

06:00     EUR        German CPI Y/Y Jun (F) C 1.00% | P 1.00%

12:30     CAD       Net Change in Employment Jun C 24.0K | P 25.8K

12:30     CAD       Unemployment Rate Jun C 7.00% | P 7.00%

18:00     USD       Monthly Budget Statement Jun P $79.0B

 

Harry Hindsight

  • EUR: Euro’s traded slightly higher into the early part of Tokyo pushing above the 1.3645 level and only towards London did the market attempt the 1.3650 level with a minor breach before dropping back from the level into the pre London session to hold around the 1.3635 areas. Portuguese banking problems led to a risk off tone as flows moved out of the Euro financial sector, the Euro moved steadily lower away from the resistance level dipping back below the 1.3600 level into early NYK before holding on the 1.3590 area again. The market moved only steadily back above the 1.3600 level as it moved towards the close.
  • GBP: Cable struggled for the most part with the market peaking just below the resistance areas of 1.7170 and holding not far away from the level for much of Asia, the move into London saw strong selling leading the way as concerns in Europe dragged on the pair and once the release of a Trade Balance number showing a slight widening the market renewed the move lower losing ground to the already falling Euro. The market eventually met support just above the 1.7100 levels and held into the NYK session as the market stated to regain some of its losses over both the USD’s and Euro,  moving back to above the 1.7140 level at one point before closing not too far from the level. Obviously I should mention that there was no change in rates or asset purchases as was expected.
  • JPY: USDJPY drifted during the Asian session slipping back from the opening 101.65 areas and moving to the 101.50 into the Tokyo market, the market held for the most part into the early part of London however, with the outflows from Europe the money had to move somewhere and JPY seemed to be the chosen currency with the EURJPY breaking back below 138.50 and upsetting that little apple cart along the way. With EURJPY heading into the NYK session around a big figure lower, the USDJPY only stopped as it reached the 101.05 areas with the strong buying eventually turning the market for a meagre rise to 101.35 levels into the London close. The market settled from that point, with the US data calming the markets a little and helped the USDJPY to maintain those levels with Inventory numbers better than expected and a lot better than the previous month reported.
  • AUD: A mixture of numbers confused the usual black box players. The market opening around the 0.9410 levels and gradually moved higher towards the numbers moving to just above the 0.9430 and the offers that stand above the level. The release of a better than expected employment number was quickly lost on the release of a worse than expected unemployment rate moving the market sharply higher to trade above the 0.9450 level as resistance disappeared only to drop just as sharply to just below the opening levels. Although the market held the 94 cent levels roughly through the balance of Asia the market in London soon started to sell the pair triggering weak stops through the 0.9390 levels and forcing the pair down towards the 0.9360 levels before support was sufficient as fresh buying in the carry trade moved into the market below the 95.00 level helping to keep the market steady and once the USDJPY started to rally the AUDJPY moved back above the level taking the Oz leg with it taking the market steadily back to the 94 cent level before closing just short.

Yesterday’s premiership results

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

NZD       Business NZ Manufacturing Index Jun A 53.3 | P 52.7

GBP       RICS House Price Balance Jun A 53% | C 55% | P 57% | R 56%

JPY         Domestic CGPI M/M Jun A 0.20% | C 0.10% | P 0.30%

JPY         Tertiary Industry Index M/M May A 0.90% | C 1.70% | P -5.40% | -5.70%

JPY         Machine Orders M/M May A -19.50% | C 0.70% | P -9.10%

CNY        Trade Balance Jun A $31.6B | C $36.95B | P $35.92B

AUD       Employment Change Jun A 15.9K | C 12.0K | P -4.8K

AUD       Unemployment Rate Jun A 6.00% | C 5.90% | P 5.80%

JPY         Consumer Confidence Index Jun  A 41.1 | C 40.3 | P 39.3

GBP       Visible Trade Balance (GBP) May A -9.2B | C -9.0B | P -8.9B

GBP       BoE Rate Decision A 0.50% | C 0.50% | P 0.50%

GBP       BoE Asset Purchase Target Jul A 375B | C 375B | P 375B

CAD       New Housing Price Index M/M May A 0.10% | C 0.20% | P 0.20%

USD       Initial Jobless Claims (JUL 5) A 304K | C 316K | P 315K

USD       Wholesale Inventories May A 0.50% | C 0.60% | P 1.10%

 

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.