Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 114.86 | EURUSD 1.24205 | EURJPY 142.67 | AUDUSD 0.86214 | NZDUSD 0.77618 | USDCAD 1.13812 | EURCHF 1.20255 | USDCHF 0.9682 | GBPUSD 1.58421 | EURGBP 0.78401 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               115.355 | 114.63

EUR/USD             1.2441 | 1.2415

EUR/JPY               143.23 | 142.61

AUD/USD            0.8652 | 0.8615

NZD/USD             0.7770 | 0.7734

USD/CAD             1.1386 | 1.1368

EUR/CHF              1.2031 | 1.2025

USD/CHF             0.9686 | 0.96715

GBP/USD             1.5857 | 1.5836

EUR/GBP             0.7847 | 0.7839
For today

  • EUR: The Euro traded higher from the opening around the 1.2420 areas pushing to the 1.2440 level but never quiet having the impetus to push through. Movement in the equity market specifically the Nikkei had the USDJPY moving and as the USD rose so the Euro was forced lower and back to the opening levels setting lows in the mid-teens before moving into the grey hours. The 1.2420 level sees light bids into the 1.2400 level with stronger bids down below the level to the previous lows around the 1.2380-70 levels, even through that level the market is likely to see profit taking and buying into the 1.2350 areas before giving way for a test towards the 1.2300 levels. Topside see’s offers from the 1.2440 level and onwards likely into the mid 1.2450 area before giving way to stops and a move to the next line around 1.2510 were yesterday’s market stalled, even through there the market sees further areas of selling and without some earth shattering movement or commentary from the ECB the market is likely to continue to struggle for movement.
  • GBP: With little in the way of independent movement the market opened around the 1.5840 areas trading slightly higher before seeing cross GBPJPY selling into the opening of Tokyo to trade the low for the session, once the selling was over the market slowly moved back to the mid 1.5850’s. The market has drifted from the highs as the USDJPY climbed steadily higher with USD’s on a general recovery mission from Friday’s sold market. Light bids from the 1.5830 levels increases to more substantial levels as the market touches through 1.5800. Topside has offers into the 1.5880 a move through only opens up the 1.5920 levels as the next week line, from there the market opens up a little but 1.5950 and onwards sees strong offers and the market seems set on 1.6000 being the topside strong levels.
  • JPY: USDJPY was quiet in early trading moving around the 114.80 levels, Tokyo opening saw the market open quickly to above the 115.00 levels before more sedately drifting back to push through the opening and the 114.80 and trading into the 114.60’s, the market continued in quiet trading before strong buying in the Nikkei triggered a revival of the USDJPY which moved quickly off the lows back towards the highs and a steady push past the 115.00 levels and pushing into the mid 115.30’s as the Nikkei slowed unable to push against the 17200 areas so the USD slipped from the highs drifting to below 115.20’s. Topside offers into the 115.40 and back to around the 115.60 levels before giving way to light stops. Stronger offers are likely into the 116.00 with likely the ubiquitous option plays with the offers likely to the 116.20’s. Downside is becoming well-travelled with bids into the 114.80 probably light in nature and becoming stronger down through the 114.20 levels and into the 114.00 levels. While the downside seems to be undefended to a great extent with bids likely into the 113.50 areas this is more a sentimental level than a strong indication of support and the openings for a deeper move are likely into the 110.00 strong support.
  • AUD: The Oz has moved in line with the JPY movement however, that movement has not been as strong and it has been pinned into a 0.8620-50 range for the most part as the carry trade pushed higher, this seems to indicate for the moment that positioning in the carry trade is as full as it is likely to be with the carry trade holding around the 99.40 areas as we move towards London. Oz holds below the previous key level with offers strongest into the 0.8680 level and probably to the 87 cent. Through that level the market is likely to see weak stops past 0.8720 and even the offers are likely to continue into the sentimental level 0.8750. Downside has only limited interest over the next big figure with bids likely to increase as the market pushes back through the 86 cent levels and the stronger supportive levels.

 

Overnight News

JPY:

Japan’s Suga Leaves Open Chance of Snap Election After Tax Delay

Abe May Dissolve Parliament This Month on Tax Delay: Yomiuri

Japan ruling bloc partner says wants to be ready for snap poll

Japan Sept Unadjusted Current Acct Surplus Y963.0B; +61.9% Y/Y

Japan Considers Doubling Size-Based Corporate Tax: Mainichi

TSE to Consider 3 Options for Trading Hour Expansion: Nikkei

Japan consumer mood worsens to 6-mth low in October -govt survey

JPY/Asia:

Japanese Investors Buy Asian Stocks with Korea Benefiting Most

JPY/CNY/KRW:

Japan, China, S. Korea May Hold Foreign Minister Talks: Nikkei

CNY:

APEC Countries Should Push Ahead on Free Trade Area, Xi Says

QE Exit Has Limited Impact on China: Securities Journal

USD/CNY:

Obama to Raise Human Rights in Meeting with China’s Xi

USD:

Fed’s Rosengren Says Exchange-Rate Movements ‘Natural’

AUD:

Australian Business Conditions Jump by Most on Record, NAB Says

Australia ANZ Weekly Consumer Sentiment Rises 0.2% to 114.8

Sydney 3Q House Prices Rise 14.6% from Year Earlier

NZD:

New Zealand Central Bank Not Threatened by Bitcoin, Spencer Says

RBNZ Says Rapid Change in Payments Systems Leading to More Risk

 

Today’s data

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

JPY         Current Account (JPY) Sep A 0.41T | C 0.03T | P 0.13T

GBP       BRC Retail Sales Monitor Y/Y Oct A 0.00% | C -0.50% | P -2.10%

AUD       NAB Business Confidence Oct A 4 | P 5

AUD       House Price Index Q/Q Q3 A 1.50% | C 1.50% | P 1.80%

JPY         Consumer Confidence Oct A 38.9 | C 40.5 | P 39.9

JPY         Eco Watchers Survey: Current Oct A 44 | C 47.2 | P 47.4

JPY         Machine Tool Orders Y/Y Oct (P) A 31.20% | P 34.70%

 

Harry Hindsight              

  • EUR: The market opened slightly higher than Friday, peaking in pre-Tokyo to the 1.2480 level before drifting back and then starting a steady climb to test the resistance into the 1.2490 areas, the market continued pressing but was unable to break through and drifted back to the opening levels into the grey hours. London were light buyers pushing through the 1.2490 levels after some sustained buying however, the market was able to gain only the 1.2510 levels before running out of steam. With little in the way of data the market eventually started to give up ground easing back to the open to then suddenly drop through and trigger weak stops into the NYK session before slowly drifting to base on the 1.2420 levels.
  • GBP: The Cable more or less followed the Euro during Asia with the EURGBP cross holding in less than a 10 pip, Cable moved from the opening 1.5880 pushing steadily to above the 1.5900 level and peaked into the grey hours to just below 1.5920 levels, the market then traded into NYK in a 1.5880-1.5910 range before dropping back into the NYK opening to the 1.5860 level and a slow drift to 1.5850 into the close.
  • JPY: USDJPY traded lower in steps from the opening around the 114.50 level the market dipped around every 2hrs dipping to 114.30 never quiet reaching the opening, then down to around the 114.10 area, by the time the market moved into the grey hours the market hit its lows around the 113.90 levels before holding steady into NYK and a gradual grind higher, the move through the 114.40 levels saw a little short squeeze and the market hit the 114.70 level and a slow finish above 114.80, as a general steady rally negated most of Fridays selloff.
  • AUD: The Oz rallied as the Yen strengthened in Asia moving from the opening 0.8645 levels pushing gently through the 0.8655 levels before squeezing through triggering stops to push the market through the 0.8680 levels and into further resistance, the market remained in touch with the level all the way through to the NYK session drifting back from the level on light profit taking from early buyers, NYK triggered further selling into the open as the USD started to recover some of Friday’s losses and US Yield improvements over the course of the day saw the Oz drift back into the 0.8610 level and a quiet finish around 0.8620.

 

Yesterday’s premiership results

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

AUD       Home Loans Sep A -0.70% | C -0.40% | P -0.90%

CNY        PPI Y/Y Oct A -2.20% | C -2.00% | P -1.80%

CNY        CPI Y/Y Oct A 1.60% | C 1.60% | P 1.60%

EUR        Eurozone Sentix Investor Confidence Nov A -11.9 | C -13.8 | P -13.7

CAD       Housing Starts Oct A 184K | C 199.8K | P 197.3K

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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