Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 102.358 102.19-28 | EURUSD 1.34001 1.3385-945 | EURJPY 137.17 136.781-136.999| AUDUSD 0.93209 0.9317-25 | NZDUSD 0.84897 0.8477-93 | USDCAD 1.08987 1.0890-1.0902 | EURCHF 1.20942 1.2098-1.2102 | USDCHF 0.90264 0.90295-435 | GBPUSD 1.66924 1.6721-25 | EURGBP 0.80269 0.8005-09 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               102.45 | 102.20

EUR/USD             1.33995 | 1.3382

EUR/JPY               137.20 | 136.965

AUD/USD            0.9324 | 0.9309

NZD/USD             0.8501 | 0.8477

USD/CAD             1.0894 | 1.0878

EUR/CHF              1.21025 | 1.20915

USD/CHF             0.9043 | 0.90265

GBP/USD             1.6739 | 1.6710

EUR/GBP             0.8013 | 0.7994

 

For today

  • EUR: Euro’s opened slightly lower from Friday with the comments from BoE’s Carney setting EURGBP lower and forcing the Euro below the 1.3400 levels in early trading, Tokyo stabilized the pair just below the 1.3390 levels and the market slowly moved above the 1.3395 level as the Euro rebalanced. Light support around the 1.3360 levels with better bids appearing further down around the 1.3340 with a push through the 1.3320 likely to see light stops before option barriers start to appear. While 1.3400 level has been penetrated over the past couple of weeks each move above the level sees sellers appear from the level and into the 1.3420 areas with weak stops likely above the 1.3430 areas, from there a succession of offers are likely every 20 pips or so as the market fades the rise and profit taking kicks in for those long from the 1.3350 areas.
  • GBP: With Carney hitting the Sunday Times with comments about rate rises coming before real wage growth become sustainable the market reacted on the opening with a push higher in Cable and GBP strengthening against everything triggering stops in some of the crosses such as GBPAUD and GBPNZD, with these stops the market was quickly driven to the highs where we started to see resistance from profit taking and those that read the article and realised there is no time frame and the Qtr1 expected rises remain where they are. Support for the moment is around the opening levels and very light, with a push lower through the 1.6715 area the market is likely to fill the gap in the charts and test the supportive area into the 1.6680 levels a test of these levels may see weak stops triggered and the market target the stronger 1.6600 levels before holding in the areas. Topside is vulnerable however, to a short squeeze through the 1.6740 areas with light offers for the moment seen just above the highs of the day and some willing to sell into any further rallies into the area. A break higher could lead to 1.6800 area with better offers above and too the 1.6820 levels.
  • JPY: USDJPY traded minimally higher from the opening as buying in GBP drove the USDJPY pair to the 102.45 levels into the Tokyo session however, once the market moved through the fixing period the USDJPY started to drift lower as interest in the pair waned a little and we pushed back through the opening 102.35 areas triggering light stops to push to 102.30 level where the market held for a period before setting the lows around the 102.25 levels. Real money buying that I’m told was prevalent over the past week or so was less conspicuous today and only towards the end of the session did the buyers return. With the downside broken the bids are sparse in the market however, the market remains open to real money buying as funds flow to yield and buying across multi yield wielding currencies holds the market in the 102 areas with 101.60 providing the downside supportive level with minor bids from 102.20, a move through this month’s lows may have a chance of opening the market up however, for the moment its dead in the water and the topside is as likely as the downside, from above 102.60 the offers start to increase in size the closer to the 103.00 levels, with likely decent stops on a break through the 103.20-30 areas.
  • AUD: The AUD has remained in a fairly tight range moving from the opening 0.9315 areas and on the back foot as GBPAUD stops went through on the opening before spending the day trading around the 0.9515-20 levels with brief efforts to the topside 0.9325 and downside 0.9310 in a lacklustre day for the AUD. Decent sellers seem to be concentrated from the 0.9330 area and upwards with offerings likely to the 0.9360 levels, a push through the 0.9380 levels will likely see weak stops and an attempt to push through the 94 cent levels however, the market still remains congested to the topside. Downside has light bids through the 93 cent level and into the 0.9280-40 range where there seems to be quite a bit of congestion appearing and only a push through the 0.9220 levels is likely to upset the cart to the downside.

Overnight News

RUB/USD/EUR:

Russia May Add Ban on U.S., EU Industrial Goods, Vedomosti Says

RUB:

Russia Says Ukraine Talks in Berlin Lead to ’Certain Progress’

CNY:

China July New Home Prices Fall M/m in 64 Cities

China Large-Scale Private Bond Default Unlikely: PBOC’s Fin News

China July FDI Falls 16.95% Y/y, Market News Reports

China Faces Pressure to Meet Trade Target: Commerce Ministry

China to Seek Private Capital in Energy Sector: People’s Daily

CNY/VND:

Chinese Ship Attacks, Damages Vietnam Fishing Boat: Tuoi Tre

GBP:

Asking prices for UK homes slump in August, led by London-Rightmove

JPY:

Japan’s GDP Collapse Complicates Abenomics, Moody’s Reports

Japan Overall Wages Rise 1% Y/y in June: Labour Ministry

Japan to Strengthen Outlying Island Defence, NHK Reports

Chugai Rises by Limit after Roche Said to Be in Buyout Talks

EUR:

France Missing 2014 Deficit Target Credit Negative, Moody’s Says

NZD:

New Zealand Services Industry Expanded at Faster Pace in July

 

Today’s data

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

GBP       Rightmove House Prices M/M Aug A -2.90% | P -0.80%

9:00        EUR        Eurozone Trade Balance (EUR) Jun C 14.9B | P 15.3B

12:30     CAD       International Securities Transactions (CAD) Jun C 14.68B | P 21.43B

14:00     USD       NAHB Housing Market Index Aug C 53 | P 53

 

Weekend News

JPY: Nippon Life to Boost Overseas Bond holdings to 4 Tln Yen: Sankei
Japan Tax Boost May Still Be Curbing Personal Spending: Nikkei
Japan’s Abe Plans to Reshuffle Cabinet Sept. 3, Yomiuri Says
JPY: Softbank to Market New Sharp Smartphone Globally, Sankei Says
EUR/RUB:

EU Warns Putin of More Sanctions as Ukraine Crisis Escalates
RUB/UAH:

Ukraine Talks in Berlin Seek to Defuse Tension as Aid Stuck
EUR/JPY:

Roche Said in Talks for Rest of Chugai in $10 Billion Purchase
Chugai Says It’s Not in Talks with Roche on Buyout
JPY/THB:

Toyota, Honda Cut 2014 Thailand Car Sales Targets, Nikkei Says
GBP:

Carney Won’t Wait for Wages to Rise to Lift Rates: Sunday Times
CNY:

Xi Says China Will Continue to Support Iraq Govt. Xinhua

Chinese officials rush to sell luxury homes amid corruption crackdown -WSJ
SEK: Swedish Premier Sees No Unfinanced Tax Cuts Through 2018

Sweden Ready to Strengthen Public Finances If Needed, Borg Says
EUR:

Germans Oppose Euro-Area Unemployment Program: WirtschaftsWoche
German Spies Intercepted Kerry Phone Call in 2013, Spiegel Says

Friday’s premiership results

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

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

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

CAD       Manufacturing Shipments M/M Jun A 0.60% | C 0.50% | P 1.60%

USD       Empire State Manufacturing Aug A 14.7 | C 20 | P 25.6

USD       PPI M/M Jul A 0.10% | C 0.10% | P 0.40%

USD       PPI Y/Y Jul A 1.70% | C 1.80% | P 1.90%

USD       PPI Core M/M Jul A 0.20% | C 0.20% | P 0.20%

USD       PPI Core Y/Y Jul A 1.60% | C 1.60% | P 1.80%

USD       Net Long-term TIC Flows Jun A -18.7B | C 27.3B | P $19.4B | R 18.6B

USD       Industrial Production Jul A 0.40% | C 0.30% | P 0.20% | R 0.40%

USD       Capacity Utilization Jul A 79.20% | C 79.20% | P 79.10%

USD       U. of Michigan Confidence Aug (P) A 79.2 | C 83 | P 81.8

 

Stay lucky

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.