Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close Wellington open

USDJPY 118.81 118.75-85 | EURUSD 1.1389 1.1382-87 | EURJPY 135.327 1.3530-38 | AUDUSD 0.77736 0.7762-69 | NZDUSD 0.74562 0.7427-32 | USDCAD 1.2450 1.2440-45 | EURCHF 1.0622 1.0615-25 | USDCHF 0.93253 0.9320-39 | GBPUSD 1.54025 1.5400-05 | EURGBP 0.73957 0.7395-0.7400 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               118.885 | 118.11

EUR/USD             1.1425 | 1.1380

EUR/JPY               135.49 | 134.90

AUD/USD            0.7795 | 0.7760

NZD/USD             0.7520 | 0.7428

USD/CAD             1.2459 | 1.2425

EUR/CHF              1.0630 | 1.0600

USD/CHF             0.93255 | 0.9288

GBP/USD             1.5437 | 1.5395

EUR/GBP             0.7409 | 0.7388

 

For today

  • EUR: Having opened a little lower from Friday with cross JPY selling dragging on the Euro a little the market slipped to the 1.1390’s in pre-Tokyo trading in very quiet trading, the market moved higher into the opening pushing to the 1.1410 levels and then a steady drift before slowly rising to the 1.1420 and the market currently holds in between those areas. Light offers into the 1.1450 levels however, depending on the volumes and attempt on the 1.1500 level through 1.1450 is open and given enough impetus a break could occur to open up further moves in an attempt on the 1.1580-1.1600 level. Downside sees strong bids into the 1.1320 level and these are likely to continue until a break through the 1.1270 area and the likelihood of stops through that level, a test of the 1.1200 will open up and downside 1.1100 areas are likely to be vulnerable.
  • GBP: Unlike the Euro the Cable opened a little higher around the 1.5415 levels and traded down to fill the gap before a steady rise through 1.5420 and holding for several hours before pushing to the 1.5430’s in quiet trading. Offers into the 1.5450 levels are likely to be a little light and the market then opens up for a test through 1.5500 with some offers in the area however, likely medium stops before opening up the way to the 1.5600 and the break down point from the steady declines over the past 8mths. The downside is still open though and there is very little with bids light around the 1.5400 and 1.5350 areas, a push through 1.5320 is likely to see weak stops and the market opening for another test down to the 1.5240-50 levels before reasonable bids appear.
  • JPY: Pre-market selling pushed the USDJPY from a flat opening to trade as low as 118.20 areas before recovering and opening in the 118.60 areas, early buying took the market only back to filling the gap on the charts before dropping back to 118.55 and into Tokyo, the market again moved to the 118.75 areas before a steady drift in the market, even though the market had a better range the volumes were still light with very little to excite, GDP showed a move out of recession however, that number was less than expected and explains the fall off as the JPY strengthens, pushing to lows just beyond the 118.40 levels. The market has recovered a little however; it remains close to the lows as we head to the grey hours. Topside offers into the 119.00 area give way to stops through the 119.20-30 areas however; from there it is all offers along the way increasing in size probably into the 120.00 areas. Downside sees bids into the 118.20 areas and through to the 117.80 levels before opening up for a test to the 117.00 area and stronger bids.
  • AUD: As the USDJPY declined so the Oz rose, moving from the opening around 0.7765 and rallying into the Tokyo session in a steady rise to the 0.7790’s before holding in the areas as the market heads towards the grey hours, with Chinese New Year towards the end of the week and a bank holiday in the US the chances of major moves are diminished a little and today’s volumes probably reflect that. Topside offers into the 78 cent level are probably light and a push through the 0.7850 areas will open up a new test to the topside but whether there is enough impetus remains to be seen, downside bids into the 0.7730 seem to have the downside covered however, a move through the 77 cent level opens up a fresh attempt lower and a test of the 0.76640 areas.

 

Overnight News

JPY:

Japan’s economy emerges from recession, growth weaker than forecast

EUR:

Fear and defiance in Copenhagen after killings

NZD:

Services and activity rise in January: Survey

 

Today’s data

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

NZD       Retail Sales Ex Inflation Q/Q Q4 A 1.70% | C 1.30% | P 1.50% | R 1.60%

JPY         GDP Q/Q Q4 (P) A 0.60% | C 0.90% | P -0.50%

JPY         GDP Deflator Y/Y Q4 (P) A 2.30% | C 1.90% | P 2.00%

GBP       Rightmove House Prices M/M Feb A 2.10% | P 1.40%

JPY         Industrial Production M/M Dec (F) A 0.80% | C 1.00% | P 1.00%

10:00     EUR        Eurozone Trade Balance Dec C 21.3B | P 20.0B

 

Weekend News

EUR:

Commission president releases analytical note entitled “Preparing for next steps on better economic governance it the Euro area”

Anti-Euro alternative for Germany polling 5.5%

SPD 46.5% Merkel’s CDU 16% in Hamburg

EU negotiations tough, deal not certain: Greek official

RUB/UAH:

Cease fire begins and fighting continues albeit not on the same scale.

GBP:

Martin Weale says interest rates are likely to rise quicker than expected.

 

Harry Hindsight

  • EUR: A quiet start in Asia saw the market drift a little lower through the session with very little going through until late in the session with comments from both the Greek PM and several European ministers with a more conciliatory tone to them, this led the market higher and the market pushed into the grey hours with a bid tone pushing to the 1.1440. The grey hours saw the market drift back from the highs however; the London market immediately took it back to the levels and traded quietly around those highs for several hours. Mixed European data saw the market and the market drifted back towards the 1.1400 levels and the opening levels. The move into NYK again saw the sellers enter the market and although the market was light on volume it eventually reached the 1.1380 areas and the market held for a short period before starting a move higher, trading into the Michigan numbers which turned out to be poor and that rally was over with and the market drifted back towards the opening levels into the close.
  • GBP: Cable remained in a reasonably tight range for the day with very little data to go on, moving from the opening 1.5385 areas the market headed higher with the Euro’s in late Asia pushing to above the 1.5415 level but unable to make its way through the 1.5420 level. A drift lower into London saw the hitting the 1.5375 level as strong selling on the opening however, it was unable to push through the level and remained in the 1.5370-1.5400 areas for several hours before following the Euro and trading to a high slightly above the 1.5420 and making the highs for the day. The market drifted back from Michigan number drifting through the 1.5400 before holding the levels into the close.
  • JPY: USDJPY opened around the 119.10 levels and remained around the 119.00 area for a good portion of the session before comments from the ubiquitous unnamed official quickly put the market lower and into the 118.50 areas after leading with no fresh easing. The move into the grey hours saw the market rising again and into the opening levels as the European market ignored the comments. London held it just below the opening levels and traded quietly until the NYK session where fresh buying was seen taking the market to the 119.20 level and its highs before drifting into the Michigan number which set the market back towards the lows and trading to just below the 118.60 level and a dull evening session with the market mired in the 118.70-80 area.
  • AUD: Moving off the 0.7730 levels the market moved steadily higher into the Tokyo session pushing to the 0.7770 as early buyers had their way. The move into Tokyo saw carry trade selling matching the buying and the market drifted back to the 0.7740 levels and held around the level for several hours, reacting to RBA Governor Steven’s Chill out comments and triggering a few weak stops on the move back however, it was unable to push through the 0.7790 levels and the move into the grey hours was the end of the rally and a return over several hours to the 0.7730 opening levels. The move into NYK eventually saw the Oz rising again in a steady push to the 0.7770 levels and then a quiet session to the close.

 

Friday’s premiership results

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

CNY        Conference Board Leading Index Jan A 0.90% | P 1.10%

EUR        French GDP Q/Q Q4 (P) A 0.10% | C 0.10% | P 0.30%

EUR        German GDP Q/Q Q4 (P) A 0.70% | C 0.30% | P 0.10%

CHF        Producer & Import Prices M/M Jan A -1.50% | C -0.60% | P -0.40%

CHF        Producer & Import Prices Y/Y Jan A -2.70% | C -1.50% | P -2.10%

EUR        Italian GDP Q/Q Q4 (P) A 0.00% | C 0.10% | P -0.10%

GBP       Construction Output M/M Dec A 0.40% | C 2.60% | P -2.00% | R -1.80%

EUR        Eurozone GDP Q/Q Q4 (A) A 0.30% | C 0.20% | P 0.20%

USD       Import Price Index M/M Jan A -2.80% | C -3.50% | P -2.50% | R -1.90%

CAD       Manufacturing Shipments M/M Dec A 1.70% | C -0.90% | P -1.40% | R -1.30%

USD       U. of Michigan Confidence Feb (P) A 93.6 | C 98.2 | P 98.1

 

Stay lucky

Andy

LMAX Exchange Market Commentary   AUDUSD   Andy Harrison  

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