Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 119.481 | EURUSD 1.21557 | EURJPY 145.246 | AUDUSD 0.81846 | NZDUSD 0.78336 | USDCAD 1.16096 | EURCHF 1.20224 | USDCHF 0.98894 | GBPUSD 1.55629 | EURGBP 0.7811 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               119.75 | 119.25

EUR/USD             1.2170 | 1.21505

EUR/JPY               145.50 | 145.115

AUD/USD            0.8216 | 0.8177

NZD/USD             0.7848 | 0.7825

USD/CAD             1.1614 | 1.1588

EUR/CHF              1.20275 | 1.2022

USD/CHF             0.9894 | 0.9881

GBP/USD             1.5576 | 1.5554

EUR/GBP             0.7817 | 0.78105
For today

  • EUR: As you would expect the market has been very quiet with the Euro holding in a quiet range around the 1.2160 levels pushing to the 1.2170 in limited buying after a better PMI number from CNY before slowly dipping lower to the opening levels. For the moment on the off chance that anything is to occur today the market to the topside is dominated for the moment from the 1.2180-1.2220 offers before stops are likely to appear through the 1.2230 area however, the offers are still likely to hold the market with further offers clustered probably around the 1.2250 areas. Light bids into the 1.2150 levels for the moment are nothing special however, through that level the bids are likely to increase as the market moves towards the 1.2100 area and suspected option barriers holding the market, given the lack of liquidity those bids are likely to be too tough.
  • GBP: Cable has been very quiet, opening around the 15560 level and trading some 15 pips higher before running out of steam and then ranging from above the 1.5570 area and back into the 1.5560’s. Topside 1.5600 area seems to be a weak key level having traded around the level for several weeks and likely to limit any upside movements for the time being and we are likely to have to wait into the New Year, Downside is very little different in the reality of a quiet day ahead, US numbers are possibly the only possible thing that may upset the cart however, the 1.5500 level is the support protecting Cable from a lower range between 1.5000/1.5500 but it has to get there for that to be valid and today is not likely to be the case.
  • JPY: USDJPY was very subdued over the course of the day however, having dipped slightly on the release of China’s PMI number the market recovered from the 119.25-30 areas low pushing back through the 119.40 opening level and triggering some weak stops late in the session around 119.60 to squeeze to the 119.70 level, this is with a background of light liquidity and volume. Light offers are likely into the 119.80 areas and then the market possibly opens through to the 120.20 area where the market broke down from. Downside bids into 119.00 and given the time of year will be more of a cushion than stopping the market from moving lower, but still probably be enough to slow and reverse the market, topside is more interesting with the market being thin there is a possibility of a short squeeze higher through the 119.80-90 levels and testing quickly to the 120.20.
  • AUD: Market opened around the 0.8185 areas and traded quietly into the Tokyo session, the market jumped to above the 0.8215 areas on the release of a better CNY PMI number only for the rest of the session to take back those gains and bring the market back in line with the opening. Topside offers into the 0.8220 levels for the moment are the first level of resistance and likely to remain unchallenged unless USD numbers come back less than expected this only opens up the market to the 0.8280 areas. Downside bids into the 81 cent level remain very strong and likely to hold the market into the New Year.

 

Today’s data

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

CNY        HSBC China Manufacturing PMI Dec (F) A 49.6 | C 49.5 | P 49.5

13:30     USD       Initial Jobless Claims (DEC 27) C 287K | P 280K

13:30     USD       Continuing Claims (DEC 20) C 2.365M | P 2.403M

14:45     USD       Chicago PMI Dec C 60.2 | P 60.8

15:00     USD       Pending Home Sales M/M Nov C 0.60% | P -1.10%

15:30    USD       Crude Oil Inventories C 0.9M | P 7.3M

 

Harry Hindsight              

  • EUR: With limited liquidity the market in Euro’s was forced steadily lower through the Asian session with EURJPY selling and USDJPY selling driving the market. Having opened around the 1.2160 levels before dropping to the 1.2140 levels for a good part of the session, grey hours selling took the market into the 1.2125 area before London started to take the market back higher and a mini short squeeze occurred taking the market quickly into the official opening and through to just below the 1.2190 levels and the awaiting offers. The market continued through the day with a choppy session as you’d expect and while the volumes were better than you would expect the liquidity across the day was limited and thus the movements were probably a little exaggerated and the market ranged from the 1.2150-80 into the NYK session, once London went open the market slowed to a trickle and settled down around the 1.2155 areas.
  • GBP: During Asia the Cable was dragged lower by the Euro more than anything else and with a lack of liquidity the market dipped to the supportive 1.5505-10 areas and held there for much of the session, a final flurry in the grey hours was quickly managed and the market jumped higher as we headed towards the London opening to take the market back above the 1.5545 level but initially unable to push through the 1.5550 levels. The opening in NYK saw the market jump again with mixed reviews of the numbers in the US pushing quickly to the 1.5560 area and a steady range around the area into the close not quiet reaching the 1.5575 levels,
  • JPY: USDJPY slowly drifted during the Asian session falling back from above the 120.60 areas opening to hold the 120.40 levels as the market moved towards the London session, the lack of liquidity and a sudden surge from the London market saw the market quickly drop through the 120.20 levels and bounce only once the market had touched the 119.60 areas, the bounce was weak and the market again triggered weak stops and pushed to the 119.20 levels, the rest of the early session was between the 119.40-80 areas until the move into NYK and another step lower as the USD slipped across the board after the numbers and the market moved steadily through the 119.00 levels before running out of momentum and returning to the quiet 119.40-60.
  • AUD: A steady session through the Asian period moving from the opening 0.8135 level the market made quiet highs above the 0.8140 levels before spending much of the session in the 0.8125-30 area until the London session saw broad USD selling as USDJPY dropped quickly, the Oz was quickly higher into the official opening touching the 0.8170 levels before then holding the 0.8160-70 levels into the NYK session and USD selling continued on the US numbers and the Oz made steady progress pushing steadily to the 82 cent levels and running out of steam. The end of the London session left the market on the 0.8180 levels and quietly moved to the close around that area.

 

Yesterday’s premiership results

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

GBP       Nationwide House Prices M/M Dec A 0.20% | C 0.30% | P 0.30%

EUR        Eurozone M3 Y/Y Nov A 3.10% | C 2.60% | P 2.50%

USD       S&P/Case-Shiller Composite-20 Y/Y Oct A 4.50% | C 4.30% | P 4.90% | R 4.80%

USD       Consumer Confidence Dec A 92.6 | C 95 | P 88.7 | R 91

 

Happy New Year

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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