Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 123.247 | EURUSD 1.10887 | AUDUSD 0.72695 | NZDUSD 0.66121 | USDCAD 1.30383 | USDCHF 0.9628 | GBPUSD 1.55587 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               123.60 | 123.07

EUR/USD             1.1099 | 1.1072

EUR/JPY               136.90 | 136.51

AUD/USD            0.7321 | 0.7257

NZD/USD             0.6676 | 0.6601

USD/CAD             1.3043 | 1.3005

EUR/CHF              1.0678 | 1.0650

USD/CHF             0.96265 | 0.9605

GBP/USD             1.5575 | 1.5556

EUR/GBP             0.7129 | 0.71155

For Today

• EUR: The market opened just below the 1.1100 areas and slowly slipped lower through pre-Tokyo, early Tokyo entered the market as light sellers of USD’s and the Euro made a weak attempt to push through the 1.1100 areas however, the EURAUD cross became more active having pushed towards the 1.5280 areas and the Euro dipped on the selling to push into the 1.1070’s with the market holding the levels for the moment as we head towards the grey hours. Topside offers light into the 1.1120 areas and a push through will likely see a mixture of orders with weak stops from yesterday’s attempts and light congestion through the 1.1140-60 areas with the market then opening only slightly for a test into the 1.1180-1.1200 areas, a push through the 1.1230 areas will see a similar pattern of offers on its way higher however, with no data for the day the market set to summer trading anything can happen. Downside bids light through the 1.1060 levels with the market then likely to be a little weak on a run to the 1.1000 areas with one suspect only limited buying interest for the time being and a move through the 1.0980 areas likely to open up a swift test to the 1.0920-30 areas.
• GBP: Cable contained within a tight range for the most part opening around the 1.5560 the market didn’t move to far from the level through the Asian session trading just above the 1.5570 level before returning to its opening levels, Topside offers likely to appear on any attempt to the 1.5600 levels however, we have been here already and the area is congested through to the 1.5650 areas and the resistance is likely to be more in depth than a strong level and a move through the 1.5660 is likely to open a quick move to test through the 1.5700 levels. Downside bids into the 1.5500 levels are likely to be returning and while the area has been traversed over the past month is likely to be the start of support protecting the lows for the month with a break through that level likely to run into waiting bids down to the 1.5400 areas before the market opens up to the downside.
• JPY: USDJPY initially struggled from the 123.25-30 opening areas falling back once the market moved into Tokyo as a follow through of yesterday’s USD selling in the NYK session, having moved to the 123.10 levels and the AUDJPY cross dropping back through 89.40 the EURAUD selling that entered the market triggered weak stops in the carry and the USDJPY moved quickly through the 123.30 and thus triggered further stops to move quickly to the 123.50 areas before stalling and holding the levels, Topside offers light in the current areas and a gentle push higher will open the market to the light offers into the 123.70-124.00 areas however, from that point the topside again seems limited with interest to sell to the 124.20 levels, through the 124.30 level there is possibly a gap in the offers and the move upwards will be governed by how strong the move to the 124.50 area would be to how effective the offers into the area are however, a push through that level will see strong offers likely to appear from the 124.70 level onwards as this coincides with the levels where Kuroda last spoke on the weakness of the Yen. Downside from the 123.30 level are likely to be light but increasing to the 122.80 areas a break through the 122.70 level is likely to open the market for a test to the 122.00 areas and possibly opening a deeper move if the market has stronger impetus however, the day has little data and given the summer volumes a limited chance.
• AUD: The Oz struggled yesterday with the decline to the 0.7260 areas roughly were the market opened, trading lightly higher through into the Tokyo session to test the 0.7285 levels before dropping back again with a resurgent USDJPY the market for the Oz suddenly changed direction with the EURAUD being actively sold and strong buying in the carry trade AUDJPY pair which moved from the 89.40 areas to 90.10 to take the Oz quickly above the 0.7310 level, The Oz slowed however, the cross Oz remained active through the session and the Oz eventually touched through the 0.7320 levels, Topside offers close to those highs a push through the 0.7325 area is likely to see weak stops however, the market is likely to struggle with offers reappearing from the 0.7360 levels only beginning to thin to the 74 cent level before more offers appear, Downside bids into the 0.7260 area seem to be dominating for the moment with a break below the 0.7240 level likely to instigate stronger selling for a move through the 72 cent level however, one suspects that this could be a key area however, until Fed chatter reappears on the subject of rates the market is likely to remain in a tight range.

Overnight News

CNY:

PBOC Reiterates Prudent Monetary Policy in 2H

China Regulator to Keep up Market Stabilization after Stock Drop

China Injects FX Reserves into Sovereign Fund: News

Ex-China Forex Official Says FX Reserves Drop Is Temporary: News

China CPI to Rise ‘Moderately’ in 2H, NDRC Official Says

JPY/PHP:

Japan to Provide Yen Loans for Philippine Rail Project: Nikkei

KRW/CNY/JPY:

1. Korea Plans to Develop Joint Index with China, Japan: Daily

AUD:

Australia ANZ Weekly Consumer Sentiment Rises 0.6% to 112.5

Today’s data

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

08:30     GBP       GDP Q/Q Q2 (A) C 0.70% | P 0.40%

08:30     GBP       Index of Services 3M/3M May C 0.50% | P 0.50%

12:30     CAD       Industrial Product Price M/M Jun C 0.20% | P 0.50%

12:30     CAD       Raw Materials Price Index M/M Jun P 4.40%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y May C 5.30% | P 4.91%

14:00    USD        Consumer Confidence Jul C 100 | P 101.4

Harry Hindsight              

• EUR: While Greece is not exactly tagged and bagged the market in general is now reversing its positions after selling the Euro while the negotiations ran there course. Opening around the 1.0980 levels the market traded into the 1.0970’s in early trading before beginning a steady rise to just above the 1.1000 levels into the London session, a break through the 1.1020 levels saw a quick move to the 1.1040 level before holding around the levels before breaking through to the 1.1080 levels and with the help of the IFO numbers the market tested through the 1.1100 level before drifting back a little. The move into the NYK session saw the market again pushing through the topside levels and gradually pushing into the 1.1120-30 levels and sufficient offers to check the market and then a steady drift to the close as the market’s interest waned.
• GBP: Euro’s moved ahead and to some extent the Cable was dragged along with the move however, GBP was unable to keep pace with the trading once it passed out of the Asian session only making meagre gains from the 1.5500 opening levels to push towards the 1.5540 areas, initial buying took the Cable to above those highs before strong EURGBP buying moved in and the cross pushed firmly above the 0.7100 levels triggering stops along the way, this move sent the Cable down through the opening levels to test the 1.5490 levels and Cable was unable to do little more than hold its levels around the 1.5510-20 areas in the run to the NYK session. USD selling was strongest from this point as the market cut its short Euro positions added to Euro buying as the crisis ebbs and equities and bonds in Europe start to look a little more attractive. Cable moved steadily higher triggering some weak stops through the 1.5550 areas and pushing towards the 1.5600 levels before running out of space and time as the London session closed and the market drifted over the balance of the session to the 1.5560 areas.
• JPY: USDJPY spent much of the day drifting from the opening levels around the 123.80 areas and the move through the Asian session left the market testing the 123.50 areas, the move into the London session saw the market continue the fall trading down to the 123.30 areas and breaking down to 123.00 into the opening period of the NYK session before finding sufficient support to halt the slide lower and a sideways session once the market regained the 123.30 areas.
• AUD: A choppy day for the Oz but limited for the most part, opening around the 0.7270 levels below Friday’s close but heading to the closing areas in early trading, the market making it to just below the 0.7300 levels before a minor setback and then ranging into London, the market initially pushed through 73 cent before dropping quickly back from the official opening however, the move lower was limited at best and bounced off those lows to test again to 73 cents, the market remained in the 0.7270-0.7300 areas through London and only received the boost higher once the NYK session opened and a quick move to the 0.7325 levels, the highs made did nothing really for the sentiment and the market then spent the day drifting back to test the lows into the close.

Yesterday’s premiership results

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

JPY         Corporate Service Price Y/Y Jun A 0.40% | C 0.60% | P 0.60%

EUR        German Import Price Index M/M Jun A -0.50% | C -0.30% | P -0.20%

EUR        German IFO – Business Climate Jul A 108 | C 107.2 | P 107.4 | R 107.5

EUR        German IFO – Current Assessment Jul A 113.9 | C 112.9 | P 113.1

EUR        German IFO – Expectations Jul A 102.4 | C 101.8 | P 102 | R 102.1

EUR        Eurozone M3 Y/Y Jun A 5.00% | C 5.10% | P 5.00%

GBP       CBI Trends Total Orders Jul A -10 | C -6 | P -7

USD       Durable Goods Orders Jun A 3.40% | C 3.50% | P -1.80% | R -2.10%

USD       Durables Ex Transportation Jun A 0.80% | C 0.50% | P 0.50% | R -0.10%

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.