Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close Wellington open

USDJPY 101.294 101.365-40 | EURUSD 1.36075 1.36005-055| EURJPY 137.796 137.655-98 | AUDUSD 0.93911 0.9388-92 | NZDUSD 0.88141 0.8800-25 | USDCAD 1.07342 1.0733-34 | EURCHF 1.21398 1.21355-435 | USDCHF 0.89205 0.89105-585 | GBPUSD 1.70992 1.7106-22 | EURGBP 0.79594 0.7950-55 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.445 | 101.33

EUR/USD             1.3608 | 1.35975

EUR/JPY               137.98 | 137.83

AUD/USD            0.9401 | 0.937

NZD/USD             0.8823 | 0.8811

USD/CAD             1.0745 | 1.0727

EUR/CHF              1.2143 | 1.2137

USD/CHF             0.8928 | 0.89195

GBP/USD             1.7133 | 1.7113

EUR/GBP             0.7950 | 0.79435

 

For today

  • EUR: The market opened on its highs around the 1.3608 areas and drifted to below the 1.3600 level in quiet trading before recovering in the second half of the session. The market held in the 1.3605 area having moved a little in the early session. Topside offers from the 1.3625 levels going back a little way with stops likely to make an appearance through the 1.3635 areas, even then the movement higher will in all likelihood meet even further stiff offers through to 1.3700 levels however, those offers are just as likely to disappear on any strong move. Downside bids 1.3600 down to 1.3570 levels are holding the market at the moment with further support from the 1.3540 levels into the figure with 1.3520 being particularly strong.
  • GBP: A very quiet session for Cable holding roughly around the opening levels 1.7120 area. Light bids appear around the 1.7100 levels a break through the 1.7080 level will see a mix as shorts lighten their positions with stops being triggered from weak longs. From there is a short way to better support around the next sentimental level of 1.7000 with this being key to the next level and a larger break down. Topside remains offered from the 1.7170 levels with leveraged players likely to be sat in front from the 1.7150 levels into the stronger 1.7170/1.7200 resistance.
  • JPY: The USDJPY was as quiet as the rest of the market moving up from the 101.35 levels to push against and briefly through the 101.40 area, for the day the market has barely broken either level and hangs just below the highs. 101.50 areas remain the breakdown point and provide the first resistance level with offers giving way to weak stops behind that level before a light mixture to the 102.00 level again the 102.10-30 levels provides stronger resistance with better offers and so stronger stops on a breakthrough of the topside. Downside bids from the 101.10 level through to 100.80 provides very strong support at the moment with in all likelihood even deeper bids defending the years lows limiting the downside until something fundamentally strong data or news can deflect those bids.
  • AUD: The Oz opened weaker than Fridays close with comments over the weekend by RBA’s Stevens intimating that a rising AUD was not in the plans and surprise moves to control the movement maybe in the planning, this led to the market opening around the 0.9380/85 areas and from there the market was always going to fill the small gap. In this case AUDJPY buying from the opening in Tokyo helped the Oz move back towards the 94 cent level over the course of the first few hours before resting just below the 94 cent levels as we move towards the London session. Topside offers from the 94 cent levels and onwards building in size as we approach the 0.9440 level, no real stops are likely after, the offers are a little patchy from then on until a move through the 0.9480 area where they begin to thicken in front of the 95 cent levels. Downside has bids around the 0.9380 levels however, 0.9360 is likely to provide better support and only a solid push through 0.9340 is likely to see stops being added to the mix.

Overnight News

JPY/EUR:

Japan investors bulk up on French bonds, bet on Eurozone

GBP:

Britain to detail $1.9B investment in defence

RUB/UHR:

Russia warns Ukraine after shell crosses border

NZD:

Improved housing numbers were released however, the numbers generally remain negative

AUD:

Ozzie credit card balances and purchases remain buoyant with both showing gains over the previous release.

 

Today’s data

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

JPY         Industrial Production M/M May (F) A 0.70% | C 0.50% | P 0.50%

09:00     EUR        Eurozone Industrial Production M/M May C 0.30% | P 0.80%

 

Weekend News

RUB:

Russian Economy stagnates as capital flight hits $75B

EUR:

ECB governing council member Jens Weidmann speaks in Frankfurt

ECB policy shouldn’t remain loose longer than needed

Weidmann ECB policy too loose for Germany, right for Euro area

Coeure says bank’s measures are not a panacea

JPY:

Japan’s ruling party loses regional election.

AUD:

RBA Governor Stevens reinforcing AUD thoughts, giving clear warning of what could happen if the AUD continues to strengthen.

GBP:

Britain to detail $1.9B investment in defence

USD:

Fed officials debate timing of interest rate increase WSJ

Fed fears risks posed by exit tools: plan almost done

 

Harry Hindsight

  • EUR: A quiet day over all with the market stuck between the immediate support and resistance levels. Opening around the 1.3605 areas and dipping slowly through to the 1.3596 area and moving between the two levels for most of the Asian session. Moving off the lows into the London session helped a little by German CPI numbers the market gradually made its higher to make the highs for the day stopping at 1.3625 and then reversing the move into the NYK session to test below 1.3595 and the range is set for the day. The range for the rest of the day through to the close was little different to the Asian session and the market went out around the 1.3610 areas.
  • GBP: A narrow range through the Asian session moving from the opening levels of 1.7133 areas trading slowly to the low 1.7120’s before reversing once the fixing in Tokyo was over with. The market ranged from then not breaking either side until the market moved into London. The market chopped around in the early session moving from the lows to touch briefly above the 1.7150 levels, the market repeated the moves lower and then back higher again before spending the move towards NYK and through the opening trading lower pushing through to the 1.7100 level into the London close, once London had disappeared from the market the market started to pick up and moving back to the 1.7120/25 levels in quiet trading overall.
  • JPY: A quiet ranging day with very little going through the market with little data and news. Moving from the opening 101.35 levels the market initially dropped to the mid 101.20’s before rallying into the fix to just short of the 101.40 levels. The market then started drifting and pushed through to around the 101.22 areas before moving back to the highs as the market in London opened, the fall back this time was barely through the 101.30 area holding the areas for the rest of the day again pushing towards the highs but unable to break in either direction.
  • AUD: The market opened around the 0.9392 areas and held the levels into Tokyo with light AUDJPY selling entering the market before the home loan numbers and the weekend moving to just below the 0.9380 level before moving back to the opening levels. The market through Asia held the 0.9390 areas. London moved in and bought the market taking it to above the 94 cent levels and holding above the level only until the NYK option expiry, and one would suspect a decent number of 94 cent options going off as the market then started dropping back to the lows during the 30mins around the cut. From the lows the market made its way slowly to the opening levels into the close in quiet trading.

Friday’s premiership results

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

AUD       Home Loans May A 0.00% | C -0.50% | P 0.00% | R -0.20%

EUR        German CPI M/M Jun (F) A 0.30% | C 0.30% | P 0.30%

EUR        German CPI Y/Y Jun (F) A 1.00% | C 1.00% | P 1.00%

CAD       Net Change in Employment Jun A -9.4K | C 24.0K | P 25.8K

CAD       Unemployment Rate Jun A 7.10% | C 7.00% | P 7.00%

USD       Monthly Budget Statement Jun A $71.0B | P $79.0B

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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