Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 101.815 | EURUSD 1.34631 | EURJPY 137.072 | AUDUSD 0.94183 | NZDUSD 0.85745 | USDCAD 1.07447 | EURCHF 1.21516 | USDCHF 0.90258 | GBPUSD 1.69862 | EURGBP 0.79256 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.83 | 101.71

EUR/USD             1.3468 | 1.34615

EUR/JPY               137.08 | 136.98

AUD/USD            0.9425 | 0.9402

NZD/USD             0.8586 | 0.8558

USD/CAD             1.0747   1.0741

EUR/CHF              1.2154   1.2151

USD/CHF             0.9029   0.90235

GBP/USD             1.6995   1.6985

EUR/GBP             0.7927   0.79245

 

For today

  • EUR: Dare I say it a very quiet session again, with the market holding just above the 1.3465 levels and very little to upset the applecart. Light offers around the 1.3480-1.3500 levels before weak stops through 1.3500 dominate into the 1.3520 levels and the first line of resistance and the point the market broke down to set lows for the year. Through 1.3520 better stops likely and a move through 1.3540 opens up the topside and 1.3600 resistance. Downside is open to the 1.3400 level however, there seems to be light to medium bids from the 1.3440 level holding the market in place one would suspect that they are not that strong however, they have held the market so far with good numbers helping to turn the market from the lows. Through 1.3400 the market becomes more congested and will struggle with a mix of orders on the 1.33 handle
  • GBP: Slow trading overall opening just below the 1.6990 level and pushing slowly to above the level over the course of the session. Bids from the 1.6970 levels run into the 1.6950 areas with the level being a key reversal of the move up from the 1.6850 areas. Light offers run from the 1.7000 levels with weak stops above 1.7010 likely before the market real sticking point of 1.7050 likely to pose more of a hurdle, even so the real offers remain above the 1.7150 levels and into 1.7200. IMF upgrades the outlook for the UK, ohhh no that’s a reversal of fortunes if there ever was one.
  • JPY: Corp and leveraged selling stopped the USDJPY from really testing the topside and the market moved from above the 101.80 in a steady drift to trade around the 101.75 levels in an otherwise dull market with volumes vastly decreased from yesterday. Topside offers from the 101.85 levels are likely to be in depth with weak stops through the 102.10 levels before meeting more resistance around the 102.20-30 level from corp offers, a move through this sees the market open to the 102.80 level before meeting stronger offers again. The downside has light bids into the 101.50 levels with weak stops likely through the 101.40 level before the bids start to thicken again as you move closer to the 101.20-100.80 supportive area, even through this level the market sees a mixture below as the lows for the year become threatened.
  • AUD: The Oz dipped slightly lower over the course of an uneventful session drifting to below the 0.9405 levels before finding sufficient support to hold the market up around the 0.9410 area and just short of the opening 0.9420 closing levels. With Light support around the 94 cent level the market is likely to see weak stops below the 0.9380 levels and then the market again opens up to the 93 cent areas. Above the market 0.9480 remains the target with resistance in front of the level and into the 95 cent level with likely better than normal stop losses for a break through the levels, of course this would be dependent on the AUDJPY movement which is also likely to supply the market above the 96.50 levels.

Overnight News

JPY:

Japan’s Inflation Rate Slows for Second Straight Month

KRW/JPY:

Park Asks Tokyo Governor to Help Improve S.Korea-Japan Relations

GBP:

British house prices grow at slowest rate in over a year in July Hometrack

NZD:

New Zealand Business Confidence Fell to 15-Month Low in July

 

Today’s data

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

JPY         National CPI Core Y/Y Jun A 3.30% | C 3.30% | P 3.40%

JPY         Tokyo CPI Core Y/Y Jul A 2.80% | C 2.70% | P 2.80%

JPY         Corporate Service Price Y/Y Jun A 3.60% | C 3.60% | P 3.60%

06:00     EUR        German GfK Consumer Sentiment Aug C 8.9 | P 8.9

08:00     EUR        German IFO – Business Climate Jul C 109.5 | P 109.7

08:00     EUR        German IFO – Current Assessment Jul C 114.5 | P 114.8

08:00     EUR        German IFO – Expectations Jul C 104.5 | P 104.8

08:00     EUR        Eurozone M3 Y/Y Jun C 1.10% | P 1.00%

08:30     GBP       GDP Q/Q Q2 (A) C 0.80% | P 0.80%

08:30     GBP       Index of Services 3M/3M May C 1.00% | P 0.90%

12:30     USD       Durable Goods Orders Jun C 0.40% | P -1.00%

12:30     USD       Durables Ex Transportation Jun C 0.60% | P -0.10%

 

Harry Hindsight

  • EUR: A quiet Asian session with the market holding a tight range before moving into the grey hours and a round of Easter European selling taking the market to the 1.3440 levels from the 1.3460 areas. While the French numbers disappointed the German PMI numbers delighted the market and the rally reversed the losses going to above the 1.3470 level before holding steady rising again on the Eurozone PMI numbers with especially good and the market moved to 1.3485 and into resistance. The move into NYK saw a steady drift lower, with very little fallout from decent US numbers. The market then moved to a quiet close ending only just above the market opening.
  • GBP: The GBP was quiet through the Asian session moving slightly lower from the opening 1.7040 level into 1.7030, early selling in the Euro dipped the Cable lower before strong selling in EURGBP took the GBP higher and we briefly moved through the 1.7050 levels. The reversal in the Euro after good numbers also turned the market in GBP on its head and chased the market down to the 1.7010 levels before stabilising and holding into the NYK session. US numbers then sent the Cable lower and through the 1.7000 level triggering minor stops and the market dipped to below the 1.6970 level before holding and rising slowly to the 1.6990 over the remainder of the session.
  • JPY: The USDJPY like the other two majors was extremely quiet holding the 101.55 levels for a good portion of the session before dipping in the last few hours to 101.45areas into the grey hours. The weakness in Euro’s initially sent USDJPY higher from the opening in London moving off the lows. With the release of the Euro numbers EURJPY took a bid tone and the rally continued moving steadily through the session, US releases continued the move moving to the 101.80/85 levels and the resistance after a strong steady rally over the course of the day the market was unable to push through those offers and finished the day just off the highs.
  • AUD: The opening was volatile with RBNZ hiking 0.25% and announcing that there would be no more rises until into 2015, this had the effect of sending NZD lower dragging on the AUD at the same time on the opening of the exchange. With the Oz dropping from the 0.9460 closing area the market quickly moved to the 0.9440 area before drifting slowly lower down to the 0.9435 and holding steadily into the next number that was to change the course of the day. CNY released a better PMI number and the Oz having moved quickly lower left the market to the topside devoid of interest until above the 0.9460 levels. The spike higher was short lived and the market moved off the highs above the 0.9470 level and the resistance, drifting steadily lower with the drag of the NZD, as the cross AUDNZD failed to maintain its highs above the 1.1000 levels. The move into London saw the market again returning to its lows around the 0.9435 levels holding a tight range into the NYK session. Better US numbers sent the market through the 0.9435 triggering some weak stops and forcing the pair to below the 0.9420 level and the market traded around that level for the remainder of the session.

Yesterday’s premiership results

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

NZD       RBNZ Rate Decision A 3.50% | C 3.50% | P 3.25%

NZD       Trade Balance (NZD) Jun A 247M | C 155M | P 285M

JPY         Trade Balance (JPY) Jun A -1.08T | C -1.11T | P -0.86T

JPY         Manufacturing PMI Jul (P) A 50.8 | C 51.9 | P 51.5

CNY        HSBC China Manufacturing PMI Jul (P) A 52 | C 51.2 | P 50.7

EUR        France Manufacturing PMI Jul (P) A 47.6 | C 48.5 | P 48.2

EUR        France Services PMI Jul (P) A 50.4 | C 48.9 | P 48.2

EUR        Germany Manufacturing PMI Jul (P) A 52.9 | C 52.2 | P 52

EUR        Germany Services PMI Jul (P) A 56.6 | C 54.7 | P 54.6

EUR        Eurozone Manufacturing PMI Jul (P) A 51.9 | C 52 | P 51.8

EUR        Eurozone Services PMI Jul (P) A 54.4 | C 52.7 | P 52.8

GBP       Retail Sales M/M Jun A 0.10% | C 0.20% | P -0.50%

USD       Initial Jobless Claims (JUL 19) A 284K | C 310K | P 302K

USD       New Home Sales Jun A 406K | C 478K | P 504K

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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