Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 101.841 101.75-80 | EURUSD 1.34305 1.3428-33 | EURJPY 136.793 136.72-17| AUDUSD 0.9397 0.9396-01 | NZDUSD 0.85544 0.8553-58 | USDCAD 1.08162 1.0812-17 | EURCHF 1.21515 1.2149-54 | USDCHF 0.90477 0.9045-50 | GBPUSD 1.69771 1.6975-80 | EURGBP 0.79112 0.7908-13 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.84 | 101.755

EUR/USD             1.3435 | 1.3427

EUR/JPY               136.77 | 136.645

AUD/USD            0.9401 | 0.9384

NZD/USD             0.8570 | 0.8533

USD/CAD             1.0819 | 1.0810

EUR/CHF              1.21545 | 1.2151

USD/CHF             0.90515 | 0.9045

GBP/USD             1.6982 | 1.6975

EUR/GBP             0.7913 | 0.79085

 

For today

  • EUR: The market opened around the 1.3430 levels and has remained fairly static throughout the session with Eid holiday limiting part of the markets. The market was unable to breech the 1.3435 levels and could only dip to the 1.3428 areas. Bids to the 1.3400 level with weak stops on a move through those levels however, the market then becomes mixed with bids expected to be slightly stronger as the market moves through to the 1.3380 levels. Offers from the 1.3440-50 area quickly melt away to stops on a break to the 1.3470-80 areas with stronger offers building towards the 1.3500 levels.
  • GBP: Almost no change on Cable opening around the 1.6980 area the market has held around the area in much the same fashion as the Euro, drifting to just above the 1.6975 levels and nothing more. Offers from the 1.6995-1.7000 are likely to be light with stops through the level being of the same weight. Better offers are likely to be seen around the 1.7020-50 areas. Bids into the 1.6960 areas have held the market up for the moment from a deeper move to test the 1.6950 levels which was the top end of the breakout higher in the early part of June, through there opens up the 1.68 handle with light bids suspected around the 1.6900 areas before 1.6850 becomes the next levels of support.
  • JPY: USDJPY has held a very tight range over the session moving from the opening 101.80 level to just below 101.76 and above the 101.83 levels. Offers appear from above the highs to 102.10 even through this level the market is likely to still remain offered as Abenomics is beginning to lose its edge as more doubt the success of the project. A break through the 102.30 area will likely see stops triggered and a further attempt on the 103.00 levels. Downside bids are light through to the 101.70 level and don’t really thicken up until closer to the 101.00 areas again with plenty of leveraged types likely to move into the market, a clear break of the 100.80 with see some minor stops with 100.50 areas again protecting the downside.
  • AUD: As with the rest the Oz has slowly slipped back as the USD moves steadily higher, opening just below the 94 cent level the early buyers touched through the level but with a lack of interest in the market the move was reversed and the Oz slipped back to touch the 0.9385 levels. Downside sees light bids from 0.9380 levels down to the 0.9340 levels where stronger bids start to appear in the market. With little in the way of stops until a move through the 93 cent level one suspect. Topside has offers from the 0.9420 level and these go back for around 40-50 pips as the leveraged players fade any rallies. Only a strong breech of the 95 cent area will trigger weak stops and the market opening up for a greater rally.

Overnight News

CNY:

Jun industrial profits YoY 17.9% vs. 8.9% prior

USD/UAH/RUB:

US says satellite imagery shows Russian troops firing artillery across the border.

 

Today’s data

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

14:00     USD       Pending Home Sales M/M Jun C -0.20% | P 6.10%

 

Weekend News

UAH/RUB/EUR:

Ukraine Army Advances as EU Plans Toughest Russian Sanctions Yet
USD/RUB:

Putin’s ‘Act of War’ in Ukraine Condemned by U.S. House’s Royce
ILS:

Israel Extends Temporary Gaza Strip Truce amid Rocket Fire
USD:

U.S. Evacuates Embassy in Libya While Urging Americans to Leave
CNY:

Chinese Premier Warns of Downward Economic Pressure at Seminar
China June Industrial Profits Rise 17.9%; Up 8.9% in May
One Percent Chinese Own One-Third National Wealth, Xinhua Says
China’s Wuxi City Eases Limits on Home Buys: China News Service
CNY/GBP:

China Urges Britain To Stop Interfering in H.K. Affairs: Xinhua
GBP:

U.K. 1H Profit Warnings Rise as Strong Pound Dents Earnings: EY
EUR:

Portugal Raised to Ba1 From Ba2 by Moody’s; Outlook Now Stable
JPY:

Abe to Reshuffle Japan Cabinet in Early Sept., Kyodo Reports
Japan May Revise Rules on Pension Risk Management: Nikkei
Japan Finds Possible Frozen Gas Deposits Off Hokkaido, NHK Says
Hokkaido Electric May Seek Rate Hike Approval in August: Nikkei

 

Harry Hindsight

  • EUR: The Euro only traded slightly higher through the Asian session moving from the 1.3460-65 area to trade above the 1.3475 level as we moved into the London session with German Gfk sentiment taking it up to the highs however, from that point onwards the numbers trended to worse than expected and the Euro was on the back foot through the early part of London falling to the 1.3445 levels for an extended period, before dipping again as the US entered the market. A good durable goods number set the USD on a steady rise and the Euro slowly drifted off to the 1.3425 areas briefly dipping through the level before holding steady around the 1.3430 levels into a quiet close.
  • GBP: Cable ranged through the day with a little drag from the Euro, opening around the 1.6985-90 areas the market moved only slightly higher into the London session to top just short of the 1.7000 level, from there the GBP suffered with the Euro, not so deeply but the drag initially took the market in Cable to below the 1.6965 levels before spiking back on the UK numbers which were unchanged and in line with expectations. The market recovered somewhat into the NYK session moving around the 1.6985 levels before the market saw light selling into the close as the weak longs covered for the weekend and a close around the 1.6975 level.
  • JPY: USDJPY traded quietly throughout the day with the Asian session holding a tight range around the 101.75 levels having opened just above the 101.80 levels. The move into London saw good buying as the Euro dipped and light buying in the EURJPY on profit taking dominated the USDJPY leg, the market moved to the 101.93 areas before finding sufficient offers to stymie the market. The USDJPY then drifted from the highs during the early part of the session in NYK and moved back to the 101.80 levels where it ranged tightly into the close.
  • AUD: The Oz suffered a steady decline over the day drifting back through the 94 cent level towards the end of the session having opened above the 0.9420 levels in Asia, the market dipped with light AUDJPY selling dominating the market in a quiet session before recovering from the 0.9405 areas into the London opening. London also chased the market back to the lows but was unable to do much other than keep the market on that level into NYK. There was weak recovery as the AUD rose as USDJPY moved higher however, AUDJPY offers around the 96.00 level again subdued the market and the Oz drifted through the 0.9405 level triggering weak stops to rest into the close around the 0.9395 levels.

Friday’s premiership results

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%

EUR        German GfK Consumer Sentiment Aug A 9 | C 8.9 | P 8.9

EUR        German IFO – Business Climate Jul A 108 | C 109.5 | P 109.7

EUR        German IFO – Current Assessment Jul A 112.9 | C 114.5 | P 114.8

EUR        German IFO – Expectations Jul A 103.4 | C 104.5 | P 104.8

EUR        Eurozone M3 Y/Y Jun A 1.50% | C 1.10% | P 1.00%

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

GBP       Index of Services 3M/3M May A 1.00% | C 1.00% | P 0.90%

USD       Durable Goods Orders Jun A 0.70% | C 0.40% | P -1.00%

USD       Durables Ex Transportation Jun A 0.80% | C 0.60% | P -0.10%

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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