Daily FX Market Commentary

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 117.87 | EURUSD 1.13804 | EURJPY 134.137 | AUDUSD 0.79371 | NZDUSD 0.74453 | USDCAD 1.23981 | EURCHF 1.02738 | USDCHF 0.9029 | GBPUSD 1.51968 | EURGBP 0.74886 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               118.28 | 117.72

EUR/USD             1.1384 | 1.13305

EUR/JPY               134.12 | 133.70

AUD/USD            0.8010 | 0.7900

NZD/USD             0.7472 | 0.7422

USD/CAD             1.2440 | 1.2390

EUR/CHF              1.0271 | 1.0205

USD/CHF             0.90555 | 0.8987

GBP/USD             1.5196 | 1.5155

EUR/GBP             0.74895 | 0.7473
For today

  • EUR: The Euro’s drifted from the 1.1380 levels and in to the TKY session around 1.1360, the market held the area for a brief period until the release of the Oz numbers saw the EURAUD fall back quickly falling from the 1.4360 levels to below 1.4180 in a quick move and the Euro slipped through to 1.1330’s before finding a base where the market held for several hours with little movement in the Euro’s. For the moment light offers appear above the 1.1380 level and into the 1.1420 areas with stops through that level likely to be slight at best with the likelihood of further offers entering the market however, a push higher does open up potential for a move higher into the 1.1500 areas. Downside will likely see light stops through the 1.1300 areas with light bids continuing and position covering likely to continue.
  • GBP: Cable slipped from the opening just below the 1.5200 levels as the market saw renewed buying in USD and more importantly the Oz with cross Oz doing a lot of work over the course of the session, the Cable drifted off to the 1.5160 areas as EURGBP pushed steadily lower as the Euro came under pressure and while the GBP was not invulnerable to the Oz movement it faired a little better against the Euro. Topside offers into the 1.5220 levels and possibly into the 1.5250 areas, a push through that area will likely see stops triggered above 1.5260 and the market then sees the next test of the 1.5300 and a possible strong move higher. Downside has potential on a push back through the 1.5100 levels with stronger bids centred around the 1.5000 areas remaining.
  • JPY: The market slipped slightly from the opening around the 117.80-90 area to push lightly through the bottom side and into the 117.70’s as early AUDJPY sellers moved into the market, the move into Tokyo saw solid buying back through the 118.00 levels before the Oz numbers, the move was halted temporarily as Oz overshadowed the JPY and having dipped lower the market moved quickly higher to push through the 118.20 levels and holding in the area for the rest of the session. Topside offers around the 118.20 levels and into 118.30 before seeing light to the 118.60 area where the market again sees strong offers into the 119.00 levels, a push through the 119.20 areas will open up the market for a test to the 120.00 levels. Downside remains the same with bids into the 117.80’s opening up for a move to the 117.20 areas if the market fails at this point then the 116.00 will open up and a deeper move.
  • AUD: The Oz had opened around the 0.7935 levels before drifting from the opening as impending Oz numbers forced the market lower, as it was it was short lived with the Oz jumping on trimmed and weighted numbers inline or better than expected taking the Oz from the low just above 79 cents in a straight line to the 80 cent level before finding sufficient resistance into the 0.8010 area, the market ran out of steam at this point however, it maintained contact with the level and continues to hold in the 0.7990 levels. Topside offers to the 0.8020 area, more offers are likely to be every 10 pips or so to the topside and could possibly slow a continued ascent for the moment with a push through the 0.8050 levels likely to see a test to the 81 cent level. Downside sees light bids into the 0.7950 areas with bids thickening towards the 0.7900 area, with congestion below the level.

 

Overnight News

AUD:

Australian 4Q Trimmed Mean CPI Rises 0.7% Q/Q; Est. 0.5% Gain

Australia ANZ Weekly Consumer Sentiment Falls 0.4% to 113.2

JPY:

Abe: No Change to Stance of Seeking Cooperation from Jordan

Hiroko Ota: Important to Implement Third Arrow of Abenomics

CNY:

Yuan Replaces Canadian Dollar as 5th Most-Used Currency: SWIFT

 

Today’s data

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

AUD       Westpac Leading Index M/M Dec A 0.00% | P -0.10%

AUD       CPI Q/Q Q4 A 0.20% | C 0.30% | P 0.50%

AUD       CPI Y/Y Q4 A 1.70% | C 1.80% | P 2.30%

AUD       CPI RBA Trimmed Mean Q/Q Q4 A 0.70% | C 0.50% | P 0.40% | 0.30%

AUD       CPI RBA Trimmed Mean Y/Y Q4 A 2.20% | C 2.20% | P 2.50%

AUD       CPI RBA Weighted Median Q/Q Q4 A 0.70% | C 0.50% | P 0.60%

AUD       CPI RBA Weighted Median Y/Y Q4 A 2.30% | C 2.20% | P 2.60%

07:00     EUR        German Import Price Index M/M Dec C -1.50% | P -0.80%

07:00     CHF        UBS Consumption Indicator Dec P 1.29

07:00     EUR        German GfK Consumer Sentiment Feb C 9.1 | P 9

15:30     USD       Crude Oil Inventories P 10.1M

19:00    USD       FOMC Rate Decision C 0.25% | P 0.25%

 

Harry Hindsight              

  • EUR: The market opened quietly around the 1.1240 areas and remained in that area throughout the Asian session dipping into the 1.1220’s late into the grey hours before finding bids and a quick rally higher, most are suggestions that commentary from the SNB was behind the rally and some go as far as to suggest intervention itself however, the market reaction was more akin to talk and buying of the rumour than anything else with the Euro rallying to above the 1.1340 level from the official opening in London, EURCHF rallied from the 1.0150 levels to above the 1.0380 area during the early exchange before dropping back over the next few hours to below the 1.0100 level suggesting in this instance that there is little credence to the intervention theory. With the fall back of the EURCHF Euro’s drifted back to below the 1.1300 and quietly held the 1.1260 level when the US data releases started to impact the market with a massive miss of targets in durable goods the stage was set and the USD dropped across the board with little stopping the Euro back through the 1.1300 weak stops were triggered through the day’s highs and the market moved quickly to the 1.1380 levels and the first sign of resistance, the market through the US session was driven by lightening of the very long USD market and the eventual high was set above the 1.1420 level on the run to the London close, once London was out of the picture the market started a steady drift lower as the market seemed to be over extended and the day traders took their profits taking the market to the 1.1340 levels and then a steady rise into the close.
  • GBP: Cable rose slightly through the Asian session pushing up from the opening around the 1.5080 level to hold the 1.5100 for most of the session before moving into the grey hours and a little chop into the UK numbers. While I stated in the previous Rambles that the UK economy is likely to balance itself with manufacturing increasing over the coming months because the drop in inflation will make them a little more competitive today was not the day to mention it as manufacturing was the underlying cause of the missed consensus with it showing a -0.1% drop while services improved and led the way with a 0.8% increase in the 4th Qtr. 2014 saying that the damage was limited with the market dipping from above the 1.5110 areas to 1.5060 before again starting to rise as the longer term view continues to hold. The US releases put paid to the GBP weakness in Cable and the market moved steadily and firmly up through to test the 1.5200 levels, a pause in action saw stops triggered on the eventual break and the market topped just above the 1.5220 levels before holding for the remainder of the session around the 1.5200 levels.
  • JPY: USDJPY opened around the 118.50 levels and apart from the initial buying pre Tokyo spent much of the day retracing the previous days moves, dropping from the 118.65 areas the market in Tokyo saw a mixture of cross selling and lightening of long USD positions for the run to the FOMC was the name of the game and the market in Asia moved steadily to the 118.20 areas in the run to the grey hours. Sharp selling post lunch time saw the USDJPY again drop through the 118.00 levels with weak stops pushing the market before coming to rest close to the 117.80 light supportive areas, AUDJPY saw strong selling during the run to London and although the market spent much of the day ranging between the 93.50-94.00 level once the Tokyo market was closed the carry trade was quickly swamped as the move into the US numbers put paid to the USD and the market dropped towards the 93.00 level and took the USDJPY down to the 117.40 areas in reasonable volume. The end of the session saw the same reversals for the USD’s as the covering ended.
  • AUD: The market saw a little bit of action with the market opening around the 0.7920 area, the market moved steadily through Asia with the confidence number doing only minor damage to the market and setting the low just below the 0.7910 level before recovering and moving up steadily as AUDJPY attempted to move back to the 94.00 level. Oz drifted into the London session before EURAUD buying started to figure strongly and as with the strong attempt lower last week the market moved quickly enough to drag the Oz higher and through to the 0.7960 levels. The NYK market had the same effect as the USD numbers disappointed and the Oz again moved higher into the mid 0.7970’s before pulling all the way back to 0.7920 as the Euro left the market behind in its rally. The market eventually settled down to trade into the 0.7940 areas for the close with only slight gains from the opening.

 

Yesterday’s premiership results

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

AUD       NAB Business Confidence Dec A 2 | P 1

GBP       Index of Services 3M/3M Nov A 0.80% | C 0.90% | P 0.70%

GBP       GDP Q/Q Q4 (A) A 0.50% | C 0.60% | P 0.70%

USD       Durable Goods Orders Dec A -3.40% | C 0.50% | P -0.70% | R -0.90%

USD       Durables Ex Transportation Dec A -0.80% | C 0.60% | P -0.40% | R -0.70%

USD       S&P/Case-Shiller Composite-20 Y/Y Nov A 4.30% | C 4.32% | P 4.50%

USD       New Home Sales Dec A 481K | C 450K | P 438K

USD       Consumer Confidence Jan A 102.9 | C 95 | P 92.6

 

Good Luck,

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.