Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 101.861 | EURUSD 1.34394 | EURJPY 136.896 | AUDUSD 0.94066 | NZDUSD 0.85451 | USDCAD 1.07991 | EURCHF 1.21486 | USDCHF 0.90396 | GBPUSD 1.6983 | EURGBP 0.79132 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               101.995 | 101.815

EUR/USD             1.34405 | 1.34305

EUR/JPY               136.005 | 136.83

AUD/USD            0.9416 | 0.9390

NZD/USD             0.8557 | 0.8514

USD/CAD             1.0809 | 1.0796

EUR/CHF              1.2150 | 1.2148

USD/CHF             0.90465 | 0.90395

GBP/USD             1.6988 | 1.6968

EUR/GBP             0.7915 | 0.7910

 

For today

  • EUR: Maybe everyone has left the building with Elvis, the market has steadily drifted lower from the 1.3440 opening areas as the USDJPY rallied to the 102.00 levels and EURJPY offers towards the 137.00 levels pushed the Euro steadily lower, the market having moved down to the 1.3430 levels holds for the moment as the market across the board stalls while waiting for impetus. Light offers run from the highs back into the 1.3450 areas before the market opens up a little to the 1.3500 levels and better offers. Downside still remains the risk according to most of the banks however, as has been seen over the past few days there is a certain stubbornness to that direction with bids holding the 1.3420 level and into the 1.3400 levels a clearance of the level still remains mixed with light bids to the 1.3380 levels however, through there opens the market for further selling.
  • GBP: With the IMF reporting that the GBP is 5-10% higher than it should be and that the economy is struggling to balance its export business with that of the service industry the Cable moved off from its highs towards the 1.6988 levels breaking back through the bottom of the previous day’s range and holding around the 1.6970 levels as the retail market read more into old news that was reported and accepted several months ago. 1.6970 to the 1.6950 shows support with bids a little suspect as the news circulates a push through the level opens up the 1.6500 level technically and a larger move if the move is confirmed. Topside offers around the 1.7000 level again hold the market in place however, they are weak and any impetus would again push through only light offers and weak stops.
  • JPY: The market opened around the 101.86 levels and dipped only slightly in the run into Tokyo. With lacklustre numbers released the market moved off the 101.83 levels and gradually moved higher to break through the 101.90 levels and pushing in pre-lunch to just short of the 102.00 levels. Offers still remain through the 102.00 level with strength to 102.10 before lighter offers running to 102.30 where I suspect stronger selling remains, a push through the level opens up the topside to 102.70 and then offers are similar to this handle into the 103.00 levels. Downside is well traversed down to the 101.20 levels however; light bids from 101.70 have held the market in place over the past 24hrs and remain in play with stronger bids through 101.20. Advance GDP figures in the US are probably the make or break if there is any variation.
  • AUD: Another quiet day for the Oz with a little movement with the carry trade again falling back from the 96.00 levels triggering some light stops and dragging the Oz from the highs above 0.9415 back through the opening 0.9405 and quickly dipping to hold around the 0.9395 levels as the USDJPY remained focused on pushing the 102.00 levels. Light bids from the 0.9385 levels and into the mid 93 cent areas hold the market for the moment with a push through the 0.9330 levels likely to open up light stops to test the 93 cent area which has held since the 1st Qtr. With the RBA strangely quiet and in particular Steven’s the market looks to be trapped for the moment as market expectations worry about any comments from that erstwhile organisation. Topside still remains offered from the 0.9420 areas onwards as cross Yen plays dominate the market. Through 0.9475 the market will likely see some breakout stops aiming for a move through the 95 cent level.

Overnight News

JPY:

Ishida: Not Appropriate to Just Look at Core CPI for Price Goal

Japan GPIF Held Meetings with CPPIB on Risk Management: Minutes

Aso: 70%+ of Cos See Recovery from Sales Tax Hike by End-July

Japan June Unemployment Rate at 3.7%; Est. 3.5%

Japan June household spending falls 3.0% vs. year ago

Japan June retail sales fall 0.6% YoY

JPY/EUR:

Onodera: Japan, France Agreed to Deepen Defence Cooperation

NZD:

Fonterra Urges Caution with Farm Budgets as Milk Price Cut

English Says Rate Rises Are Slowing Housing Market: Post

AUD:

Australia Affirmed by S&P; Sees Ability to Absorb ‘Shocks’

Australia ANZ Weekly Consumer Sentiment Rises 2.4% to 116.2

 

Today’s data

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

JPY         Jobless Rate Jun A 3.70% | C 3.50% | P 3.50%

JPY         Household Spending Y/Y Jun A -3.00% | C -3.70% | P -8.00%

JPY         Retail Trade Y/Y Jun A -0.60% | C -0.40% | P -0.40%

08:30     GBP       Mortgage Approvals Jun C 63K | P 61.7K

08:30     GBP       M4 Money Supply M/M Jun C 0.00% | P -0.10%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y May C 9.80% | P 10.80%

14:00     USD       Consumer Confidence Jul C 85.5 | P 85.2

 

Harry Hindsight

  • EUR: A range bound day with the Euro slowly moving a touch higher late into the day, Asia opened little changed from Fridays close around the 1.3430-35 levels and held around the 1.3430 for the move into the grey hours, the market moved slightly higher during the pre-London opening before dropping back with small sellers appearing just below 1.3440. The move towards the NYK session saw the Euro rise to a 1.3435-42 range and the market broadly remained in that area throughout the session not quiet breaking the 1.3545 area.
  • GBP: Cable held a tight range through the Asian session with parts of the market closed for the Eid holiday, opening around the 1.6980 levels the market moved around the level into the London session and although the markets range increased to over 10 pips in the early part of the session it was a few hours before the market made a move to the topside trading through the 1.7000 into the NYK session before holding steady for a short period around the 1.6995 levels. NYK again attempted the topside with volumes light it managed a similar high before slipping back in the back end of the session as leveraged types took back weak longs and pushing the market down into the opening levels and a quieter finish than the day had been.
  • JPY: The USDJPY was little different to the rest of the market trading in a narrow band as retail, leveraged players continue to buy into the real money offers, add to which a continuing flight to yield almost anywhere that offers some return for their investment. Moving from a slightly weaker 101.79 opening the market traded to just below the 101.76 levels before moving into Tokyo and a steady session of buying moving the market only to the 101.84 level into the London session. The market hit above the 101.90 level again before holding and drifting lower into the NYK session as light safe haven flows took advantage of the levels and the market moved back to the lows. Late NYK reversed the losses as the market weighted the respective damage done with economic isolation of Russia in relation to the different economies involved. The market ended the day just off its highs.
  • AUD: A slightly better range of the rest but even so the movement was quiet as the Oz dipped from the highs just above the 94 cent to touch below 0.9385 in the run to the grey hours, London started the day as a strong buyer leading the market in a steady climb back above the 0.9410 levels to leave the market with little to do throughout the NYK session moving between 0.9405-10 for the most part.

Yesterday’s premiership results

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

USD       Pending Home Sales M/M Jun A -1.10% | C -0.20% | P 6.10% | R 6.00%

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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