Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 120.659 | EURUSD 1.21547 | EURJPY 146.672 | AUDUSD 0.8134 | NZDUSD 0.77869 | USDCAD 1.16367 | EURCHF 1.20304 | USDCHF 0.98972 | GBPUSD 1.55175 | EURGBP 0.78333 |

 

Interbank Ranges as of 6am London time

Highs    Lows

EUR/USD             1.2163 | 1.2123

USD/JPY               120.69 | 120.31

USD/CHF             0.9920 | 0.9893

EUR/JPY               146.73 | 145.945

EUR/CHF              1.20315 | 1.20315

EUR/GBP             0.78395 | 0.7816

AUD/USD            0.8144 | 0.8122

NZD/USD             0.7787 | 0.7770

 
For today

  • EUR: With the Greek question again raising its head Europe again faces whether the possibility of a break away is just over the horizon, or some serious renegotiations of debts incurred however, this in a time of lower liquidity will likely have its toll if news is lacking over the coming week as is likely.  Limited movement through Asia saw the market drop back from the opening 1.2160 levels triggering light stops through the 1.2150 level to push into the mid 1.2135 levels and there it remained into the grey hours. Topside offers are limited now until you reach the 1.2220 areas were they thicken, a push through the 1.2230 areas will only give limited access to the 122.50-70 levels and a struggle to the 1.2300 areas. Downside is likely to be limited for the short term by 1.2100 option plays likely to contain the downside movement however, through the level will see some stops likely to kick in and an opening to the 1.19 handle.
  • GBP: Cable held a tight range through the session holding above the 1.5505 levels and unable to break back above the opening 1.5520 levels in slow trading. Bids into the 1.5500-1.5490 levels with likely stops below the 1.5480 levels and the step into last year’s ranges 1.4800-1.5500. In the meantime though bids are likely to increase on a move down through the 1.5460 level and probably concentrated around the sentimental areas. Topside offers are mostly around the 1.5560 levels however 1.5600 was the centre of attraction on the way down struggling through only to bounce back higher again and could form similar trading around that level if it had the strength to push towards the level however, it’s still the holiday season and New Year will see more liquidity to break in either direction.
  • JPY: USDJPY woke up with different ideas today with the market drifting lower once the market moved into Tokyo from the opening 120.65 areas trading down to the 120.50 and then spending the longer portion of the session pushing to 120.40, the move lower from there was limited but the grey hours attracted further attention for the market to move towards the 120.30’s. Topside offers run above the 120.80 level and into the 121.00 areas before light begins to appear however, those offers are likely to increase on a move through the area as day traders play the range and only a break above 121.30 is likely to open up further moves to the topside. Downside bids are likely to be less obstructive but present from the 120.20 areas and through the 120.00 level with 119.80 possibly the point where stops appear and the market opens to a test limited by liquidity only to 119.00 areas.
  • AUD: As with the rest of the market the ranges have been quietly contained with early buyers swatted by a leading index CNY number showing the worst reading since 2009 at 99.17 and the previous reading revised down from 99.77 to 99.37. This sent the Oz off its highs above the 0.8144 areas quickly through the opening 0.8135 and touching through to the 0.8125 levels in limited action with much of the damage coming from the AUDJPY selling that both AUDUSD and USDJPY selling opened up. Bids into the 81 cent level still remain key to the Oz remaining in the current range and a push through the 0.8090 level is likely to see some strong stops triggered to the downside. Topside this week still remains limited to the interaction of the AUDJPY and with the market down a little may see support appearing but not in sufficient volume to push back through to far with offers likely above the 0.8170 level and into 82 cent, so quietly contained.

 

Overnight News

CNY:

To relax restrictions on banks’ Yuan trading, adding transparency

JPY:

Japan’s ruling coalition pledges corporate tax cuts: in draft

GBP:

First case of Ebola in the UK was diagnosed in a health worker recently returned from Sierra Leone

EUR:

Grexit spectre returns to the market with several broadsheets leading with the story

 

Today’s data

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

CNY        Leading index Nov A 99.17 | P 99.77 | R 99.37

07:00     GBP       Nationwide House Prices M/M Dec C 0.30% | P 0.30%

09:00     EUR        Eurozone M3 Y/Y Nov C 2.60% | P 2.50%

14:00     USD       S&P/Case-Shiller Composite-20 Y/Y Oct C 4.30% | P 4.90%

15:00    USD       Consumer Confidence Dec C 95 | P 88.7

 

Harry Hindsight              

  • EUR: After a slow start in Asia with the Tokyo session closed for family day, the market slipped back a touch from the opening 1.2180 levels to post lows in the upper 1.2160’s before rallying from what would have been the Tokyo opening pushing steadily to above the 1.2190 level, the move towards the London session saw the market rise again to test the weak resistance around the 1.2200 levels, it held initially before dipping back through the opening levels into the grey hours. London opening saw fresh impetus entering the market and the market rallied with ECB/EU talking up the situation while everyone looks at the third vote in Greece coming to nothing and uncertainty increasing over the future. The market peaked above the 1.2220 levels but only just before dropping back to the figure areas with little volume to keep the market going, a second run higher over a more extended period into the NYK session met a similar fate at a lower level and the market dropped back steadily to the Asian lowers and a quick push lower as weak stops were triggered to take the market briefly below 1.2150 before running in a 1.2150-60 range to the close.
  • GBP: Cable rose steadily through the Asian session as the market sold USD’s over the course of a limited session, moving from the opening 1.5560 levels Cable topped out above the 1.5585 levels and although it spent an hour at the level the market was unable to make any more headway, the move into the London session saw the market dip back to the opening levels before again trying to push through the highs and failing for the last time and the drag of the Euro dropping the Cable back to the 1.5540 levels. Cable did make efforts to move back higher into the NYK session however, the Euro again dragged on the Cable and moved the market steadily to the 1.5510-20 areas where the market finished for the day on limited volume.
  • JPY: Early buyers in the market on the back of another additional stimulus for the economy with $29B to be added in the New Year, the market rose from the opening 120.40 levels pushing to just above the 120.60 levels before drifting a little towards the London session, the market eventually hit the opening levels and a quick squeeze lower as the market ran through weak stops from the early buyers to send the market to the 120.20 levels. The move into the London area saw the market again slowly rising and keeping in a tight channel to the 120.50 levels through London and the opening in NYK saw the market for USD’s reappear to push through the highs and to the 120.70 levels before beginning a long period of drift into the close.
  • AUD: Two fold effect on the Oz saw the market move steadily higher through the Asian session with a weakening of the USD and additional buying in the AUDJPY carry trade helped the Oz to move from the opening 0.8120 areas and off the lows close to 0.8110 levels to head to the 0.8135 level in limited trading, the move towards the grey hours saw another burst of buying and the market failing just below the 0.8150 areas and settling back to the 0.8135 and the move into London. USD weakness saw the market again move higher pushing to above the 0.8160 levels into the early part of London before spending the rest of the day slowly slipping back as JPY started to weaken again and the USD advanced across the board.

 

Yesterday’s premiership results

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

CHF       UBS Consumption Indicator Nov A 1.29 | P 1.29

 

Good Luck,

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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