Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 119.578 | EURUSD 1.08238 | AUDUSD 0.77785 | NZDUSD 0.75897 | USDCAD 1.21453 | USDCHF 0.95465 | GBPUSD 1.50566 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               119.67 | 119.44

EUR/USD             1.08295 | 1.07845

EUR/JPY               129.42 | 128.955

AUD/USD            0.7797 | 0.7765

NZD/USD             0.7600 | 0.7543

USD/CAD             1.2156 | 1.2137

EUR/CHF              1.03365 | 1.03245

USD/CHF             0.9573 | 0.9540

GBP/USD             1.5065 | 1.5028

EUR/GBP             0.7190 | 0.7175

For today

• EUR: Opening around the 1.0820 levels the market then drifted into Tokyo testing to the 1.0810 level in quiet trading, with USDJPY moving lower with the Tokyo fix the Euro managed to post the highs towards the 1.0830 level however, USDJPY’s move was shallow and the movement in the Euro pushed the cross EURJPY against the 129.50 areas and the move into the Tokyo session attracted some reasonable offers this then pressured both the Euro and USDJPY and the Euro pushed steadily lower through the 1.0800 levels and into the high 1.0780’s, the cross selling continued taking the market in the cross to 129.00 and sufficient bids to hold the market and Euro’s started to recover to the 1.0800 levels. Topside offers above the 1.0840 level now have the possibility of weak stops on a break through the 1.0850 areas and then into stronger offers from 1.0870-1.0900, a push higher and through 1.0930 will likely see fresh stops and an opening for a test into the 1.0980-1.1000 areas. Downside bids light into the 1.0780-70 areas and then weak stops likely through 1.0760 and a test back to 1.0700 areas and stronger bids below into the 1.0680. Greece still likely to dominate the market.
• GBP: The market moved off and opening just above the 1.5050 levels after a the previous days choppy session, the market was dominated by movements in the Euro moving in line with EURGBP trading in a 20 pip range and retracing early gains to push to the 0.7175 areas. Cable touched above the 1.5060 level before drifting back to 1.5030 as cross EURJPY selling moved the market, the Cable then started to move towards the 1.5050 areas again as the market moved towards the grey hours. Topside offers into the 1.5070 are likely to be in depth and a push through to the 1.5100 levels are likely to provide strong resistance for the moment however, a push through the 1.5110 areas will likely see plenty of weak stops however, the market is likely to run into some congestion through to the 1.5200 levels and with no data for the day most likely be pulled around by the Euro for the most part. Downside bids light into the 1.5000 levels and those light bids are likely to continue to the 1.4960 areas, with mixed orders below the level the Cable is likely to be dominated by stops for a short period and then the bids are likely to thicken as the market moves to the 1.4920-00 areas.
• JPY: USDJPY opened around the 11960 areas and drifted into the Tokyo session quietly, fixing supply in USDJPY initially moved the market lower and to the 119.45 areas however, once the fixing was past the EURJPY cross became active and solid selling continued for several hours chasing the market from the 129.50 areas and towards the 129.00 areas, and USDJPY held around the lows. As the selling subsided the market again made its ways to the opening levels before holding quietly into the grey hours. Topside offers above the 120.00 level seem to be strong for the moment and only a push through the 120.30 opens up another test to the 121.00 areas. Downside bids into the 119.40 level are likely to see weak stops appear before better bids make an appearance from the 119.20 areas and into the figure, a move through there will have a mixture of orders showing but again the bids are likely to eventually win with those likely to continue into the 118.60-50 areas before the market has the potential to see yield buyers moving in.
• AUD: The Oz made a brief stab towards the 0.7800 level as the USDJPY dipped back on the fixing however, it was more of a false move than anything else and once the market failed to push through it slowly moved back through the opening 0.7780 levels and moved off the 0.7770 level to trade quietly over the balance of the day. Topside offers into the 0.7800-10 areas are likely to see further offers on a push through those levels and only a strong push through the 0.7840 level opens up any potential to trade higher. Downside bids light into the 0.7760 with weak stops likely through the level better bids then start to make an appearance from the 0.7720 areas and are likely to continue through the downside to 0.7680 before the market opens  only a little for another test into the 76 cent and ultimately 0.7550 areas.

Overnight News

JPY:

LDP’s Yamamoto Says BOJ Is Likely to Boost Stimulus on April 30

Kuroda: Cheaper Oil to Push Up Growth, Prices Over Longer Term

Nakaso: Ending Japan’s Deflation Contributes to Asian Growth

Nikkei Surge No Reflection of Economy, Opposition Chief Says (1)

Japan’s GPIF to Have 2 Directors After Revised Law Passed: Kyodo

JPY/CNY:

Aso: China’s Xi Mentioned AIIB at Meeting with Abe in Indonesia

CNY/IDR:

China’s Tsingshan to Invest $2.8b in Indonesian Smelter: Daily

PHP/CNY:

Philippines Says ‘Matter of Time’ Until Yuan Gets Reserve Status

NZD:

Magnitude 6.4 Earthquake Strikes Central New Zealand: Geonet

Today’s data

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

JPY         Corporate Service Price Y/Y Mar A 3.20% | C 3.30% | P 3.30%

JPY         All Industry Activity Index M/M Feb A 0.1% | C -0.90% | P 1.90% | R 0.5%

08:00     EUR        German IFO – Business Climate Apr C 108.4 | P 107.9

08:00     EUR        German IFO – Current Assessment Apr C 112.4 | P 112

08:00     EUR        German IFO – Expectations Apr C 104.5 | P 103.9

12:30     USD       Durable Goods Orders Mar C 0.80% | P -1.40%

12:30    USD       Durables Ex Transportation Mar C 0.70% | P -0.40%

Harry Hindsight              

• EUR: Euro’s struggled in Asia with the market opening around the 1.0720 areas and then dipping towards the 1.0700 level into the Tokyo fix, with the market continuing to struggle as the USDJPY pushed into and through 120.00, USD’s continued to remain strong for a period of time and the Euro dipped through the 1.0700 level however, the USD could not make any more headway and slowly moved back to the opening levels as the market moved towards the grey hours, the move into the grey hours saw quick selling of the EURJPY cross and USDJPY and Euro’s again moved through the 1.0700 level and this time dipped to the 1.0670 levels before the market started a steady recovery over the rest of the day. Early talk from Europe spoke of urgency, with Tsipras asking Merkel for the talks to be accelerated and this set the tone for the day, to be honest the differences are more important I would assume and not the time frame as both parties still seem to be too far apart. PMI numbers were mostly ignored however, again on the weak side and the market rallied through to push above the 1.0840 levels before holding for an hour or so to drift into a 1.0820 level close.
• GBP: A mixed day for Cable with the opening around the 1.5040 level seeing early selling as USD moved up slightly in relation to the JPY in particular and forcing Cable back to the 1.5015 areas, the market managed to rise back towards the opening levels as the USDJPY dropped back away from the 120.00 levels. The move into the grey hours saw the Cable dropping back steadily as a consequence of the drag of the Euro, the release of the UK numbers had mixed reaction with the retail sales numbers over shadowing the PSBR number which showed a strong revision for last month and an almost inline monthly figure. Cable was pushed to the lows around 1.4960 levels before being steadily dragged along by the rise in the Euro, the cross EURGBP saw a steady push higher through the session as the GBP was unable to keep pace with the Euro in the opposite move of the day before. Cable eventually peaked at the 1.5070 levels before holding and trading in the 1.5060 levels into the close.
• JPY: Early trading was focused on the 120.00 levels pushing from the opening levels around the 119.95 levels and pushing through 120.05 into the Tokyo fix, the market continued to push above the 120 levels but unable to break higher, after several hours the market rejected the level  dropping back steadily at first to the 119.90 levels before accelerating as weak stops were triggered and the market dropped into the 119.75 levels and eventually slipping through to below 119.70, Tokyo lunch saw light buying to return the market to 119.90, one suspects in anticipation of an attempt at the 120 levels in the London session, London opened in the 119.90 levels and didn’t disappoint, it made the attempt however, as with the previous move it ran into a brick wall and the market then traded into the NYK session trading around the 120.00 levels. A move lower again triggered weak stops through the 119.75 levels as the sellers moved back in and 119.60 was hit, with weak numbers in the US the market again started to trade lower and this time the market managed to move to the 119.45 levels before running out of time and the market moved sideways and traded slowly back to 119.60.
• AUD: As with the Cable the Oz was dominated by moves in two currencies and had very little independent interest, moving initially lower as the USDJPY pushed higher the Oz dipped from the 0.7745 levels to bounce off the 0.7720 times a few times, then buying in the carry trade gradually moved the Oz to the 0.7760 level with the help of resurgent commodities the talk of the day, USDJPY then dropped quickly and the Oz and the carry trade came under pressure, and again the Oz moved back to the lows to hold above the 0.7720 again, the next several hours was with the Oz bouncing around the 0.7720 levels and only the US numbers and a weaker USD saw the Oz rising quickly in the NYK session and moving steadily to the 0.7790 levels and then as quiet play around the 0.7780 levels to the close.

Yesterday’s premiership results

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

JPY         Manufacturing PMI Apr (P) A 49.7 | C 50.8 | P 50.3

CNY        HSBC Manufacturing PMI Apr (P) A 49.2 | C 49.4 | P 49.6

CHF        Trade Balance (CHF) Mar A 2.52B | C 2.16B | P 2.47B

EUR        France Manufacturing PMI Apr (P) A 48.4 | C 49.4 | P 48.8

EUR        France Services PMI Apr (P) A 50.8 | C 52.5 | P 52.4

EUR        Germany Manufacturing PMI Apr (P) A 51.9 | C 53.1 | P 52.8

EUR        Germany Services PMI Apr (P) A 54.4 | C 55.6 | P 55.4

EUR        Eurozone Manufacturing PMI Apr (P) A 51.9 | C 52.6 | P 52.2

EUR        Eurozone Services PMI Apr (P) A 53.7 | C 54.5 | P 54.2

GBP       Public Sector Net Borrowing (GBP) Mar A 6.7B | C 6.6B | P 6.2B | R 4.8B

GBP       Retail Sales M/M Mar A -0.50% | C 0.40% | P 0.70% | R 0.60%

USD       Initial Jobless Claims (APR 18) A 295K | C 290K | P 294K

USD       New Home Sales Mar A 481K | C 510K | P 539K

Good Luck,

Andy

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material 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. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX 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 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 material produced in this Blog was obtained from sources deemed to be reliable, LMAX 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.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting 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.