Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 117.817 117.60-92 | EURUSD 1.23906 1.2379-80 | EURJPY 146.012 145.58-99 | AUDUSD 0.86715 0.8663-74 | NZDUSD 0.78829 0.7876-85 | USDCAD 1.12325 1.1231-49 | EURCHF 1.20161 1.2017-23 | USDCHF 0.96985 0.9707-12 | GBPUSD 1.56552 1.5641-79 | EURGBP 0.79132 0.7906-24 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               117.995 | 117.58

EUR/USD             1.23995 | 1.23595

EUR/JPY               146.27 | 145.59

AUD/USD            0.8700 | 0.8665

NZD/USD             0.7911 | 0.7875

USD/CAD             1.1245 | 1.1225

EUR/CHF              1.2031 | 1.2018

USD/CHF             0.9740 | 0.97025

GBP/USD             1.5669 | 1.5633

EUR/GBP             0.79155 | 0.79035

 

For today

  • EUR: The market opened below Fridays close with sellers attempting to break the market lower, this bids did not give too much and pushed against the flow and the market was only able to get into the mid 1.2360’s before steady buying pushed the market steadily back filling the gap on the charts and a move towards the 1.2400 levels as we approach the London session. Topside offers are likely to be thin but present from the 1.2440-60 levels before opening up to weak stops and the 1.2520 areas and better offers even through this area the market is likely to see offers continuing to above the 1.2550-60 levels and only a break through the 1.2580 levels is likely to set a test of 1.2600 and above. Downside is open to further weakness with the 1.2330-40 the support area showing as a technical support dating from 2012/2010/2006, a push through this area opens up further downside potential and a trading range from that area to just below 1.1900. With bids likely along the way but nothing clearly defined. Limited data on the day will likely see the market moving on whispers, and rumours of what may be.
  • GBP: As with the Euro, Cable opened slightly lower before moving off the 1.5640’s and the lows to trade steadily higher pushing through into the mid 1.5660’s before holding steady. The downside see’s bids into the 1.5600 levels and has held twice previously, whether that remains is questionable if the Euro continues to weaken. From then on the bids continue to rest around the sentimental areas 1.5500, 1.5400 levels and will see successive lows for the year if they were to be tested. Topside see offers into the 1.5700 levels and through the level, a break through the 1.5750 will see stops triggered and the market opening to light offers into 1.5800, stronger offers are likely into 1.5850 areas and for the moment are likely to cap the market.
  • JPY: The USDJPY opened around the 117.80 levels and moved steadily higher in pre-Tokyo before seeing a similar but less exciting move as the one on Friday, selling into the Tokyo session set the market back to the 117.60 levels before the market saw steady but continual buying to the 117.90 levels as the market recovered as the market observed the first cut in interest rates since 2012. Topside offers into the 118.00 level are likely to be weak but there for the moment and stretching to the 118.10 areas, through 118.10 there is a possibility of weak stops before reaching a stronger area of resistance around 118.40. Ultimately the 119.00 holds the strongest levels possibly triggering further verbal intervention if the market were to approach the areas. Downside see’s light bids moving in the market around the 117.60-40 areas and a push through the level again see’s the path lower opening up with a test of 117.00 the next level and then free movement in the 115.50-116.50 areas. Of course it being a bank holiday the market is likely to struggle for direction for the moment.
  • AUD: A steady rise through the session moving from the opening 0.8675 levels with the interest rate cuts in China helping the initial market higher, the market moved into the Tokyo session with AUDJPY carry trade buying holding the market and moving the Oz to the 87 cent level and into light offers before drifting for the rest of the session in the mid 0.8680’s. Topside offers from above the 87cents level and into the 0.8720 levels before the possibility of weak stops through the levels, even through that level the possibility is that every 20 pips there will be offers capable of turning the market from rising to strongly. The downside sees bids from the 0.8620 area and through the 86 cent level and a push through 0.8560-40 will open up a deeper move and a final test of the 85 cent levels.

 

Overnight News

JPY:

Abe Support Falls, Economic Policies Opposed: Nikkei

Abe’s LDP Leads Support in Pre-Election Poll, Asahi Says

Low voter turnout could erode Japan PM Abe’s call for fresh mandate

Abe Visits Quake-Hit Nagano amid Aftershocks, Mudslide Warnings

CNY:

China Scraps Offshore Listing Fund Repatriation Approval

China Should Create Global Offshore Yuan Clearing System: Daily

China Researcher Suggests Interest Rate Cut Next Yr. Sec. Times

China Govt. to Buy Homes for Affordable Housing: Daily

NZD/CNY:

N.Z’s Key Says Xi ‘Not That Concerned’ by China GDP Slowdown

KRW/CNY:

S.Korea to start yuan/won trading on Dec 1 – sources

NZD:

New Zealand Posted Record 5,250 Permanent Immigrants in October

 

Today’s data

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

09:00     EUR        German IFO – Business Climate Nov C 103 | P 103.2

09:00     EUR        German IFO – Current Assessment Nov C 108 | P 108.4

09:00     EUR        German IFO – Expectations Nov C 95.5 | P 98.3

 

Weekend News

JPY:

Abe’s Party Most Favoured in Pre-Election Poll, Yomiuri Says
Abe May Propose Growth Subsidies for Local Governments: Kyodo
Japan May Cut Corporate Tax by 2 Percentage Points: Kyodo
Japan Warns of Aftershocks as Quake Injures 39, Destroys Homes
Japanese Utilities to Resume Buying Solar Power: Nikkei
EUR:

ECB Will Assess Stimulus Programs in First Quarter: Constancio
ECB’s Constancio Says No Decision Made Yet on Sovereign Bonds
ECB’s Constancio Says ‘Very Unlikely’ Italy Would Leave Euro
Trichet Says Economy Still Not Dynamic Enough, Expresso Reports
CNY:

Five Chinese Banks Raise Deposit Rates to Benchmark Ceiling
China Vice Mayor, Prison Heads in Suspected Graft Probe: Xinhua
China Rate Cut Not Signal of Mass Liquidity Ease: Xinhua Comment
OIL:

OPEC Watchers Set 50-50 Odds on Production Cut in Vienna: Energy
RUB:

Russia to Promote Free Trade between EU, Customs Union: RIA
AUD:

Australia Raises A$5.7 Billion as Abbott Sells Medibank in IPO
GBP:

U.K. Government Analysing Latest Islamic State Hostage Video
SEK:

Sweden Faces Budget Crisis Loefven Says Lawmakers Can’t Allow

 

Harry Hindsight

  • EUR: After a reasonably quiet Asian session with the market moving from the 1.2540 opening to push above the 1.2560 level with EURJPY selling dominating the early part of the session eventually dragging on the Euro later into the session and a quiet move into the London session. An early start to the day saw Draghi on the wires with stronger tone than we’ve seen before but still the market awaits the details with even Draghi in the past doubting the effectiveness of some of the measures. The market reacted to his speech trading quickly from the 1.2540 moving quickly to the 1.2480 and triggering weak stops before continuing to the next levels and the market then struggled for several hours into the NYK session from the 1.2440. The market eventually broke through the 1.2400 levels before coming to the 1.2380 level and holding for the remainder of the session in the area.
  • GBP: A choppy day for the Cable moving from the 1.5690’s opening, dipping in early trading to the 1.5680 levels before moving steadily higher and above the 1.5710 as a consequence of the USDJPY movement. The market moved into the London session weakening with no data and only started to recover after the Euro’s had made its move lower, the market held the 1.5630 areas this time and while the market moved between the 1.5630-90 levels it was never able to break out in either direction and eventually settled down to a quite range around the 1.5650 levels.
  • JPY: The USDJPY opened around the 118.25 area and apart from a quick move higher into the high 118.30’s, the early Japanese came in as quick sellers and the movement to the Tokyo opening saw the market moving through the 118.10 levels, the selloff followed comments from FinMin Aso and comments on sudden movements in FX, given the several weeks of sudden movements it obviously means its reached the point they wanted. The selling followed through dropping through the 117.90 levels and another quick move to the 117.60 and then a steadier move touching into the 117.40’s before finding sufficient support and moving back into the 117.80’s. The market moved around the level for much of the session unable to make new lows or breaking above the 118.10 levels as it traded in a fairly choppy market throughout the day.
  • AUD: The Oz held up through the turmoil in the USDJPY with movement to the topside available with the USDJPY dip. The market held around the 0.8630 levels for much of the session having moved off the opening levels to push to the 0.8650 level in early trading, but was unable to push through the topside and slowly drifted back off towards the London session pushing to the 0.8610 levels to set the lows for the day. Cross movements sent the Oz higher into the London session moving quickly through the 0.8650 and triggering weak stops and a push to above the 0.8720 levels before giving ground. The market held in the 87 cent levels for a few hours into the NYK, before a steady drift down to the 0.8660 levels and the light bids around that area.

 

Friday’s premiership results

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

GBP       Public Sector Net Borrowing (GBP) Oct A 7.1B | C 6.9B | P 11.1B | R 10.6B

CAD       CPI M/M Oct A 0.10% | C -0.20% | P 0.10%

CAD       CPI Y/Y Oct A 2.40% | C 2.00% | P 2.00%

CAD       BoC CPI Core M/M Oct A 0.30% | C 0.20% | P 0.20%

CAD       BoC CPI Core Y/Y Oct A 2.30% | C 2.20% | P 2.10%

 

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.