Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 122.608 | EURUSD 1.08135 | AUDUSD 0.71258 | NZDUSD 0.65271 | USDCAD 1.32901 | USDCHF 1.00017 | GBPUSD 1.52333 |

 

Interbank Ranges as of 6am London time

Highs    Lows

USD/JPY               122.78 | 122.50

EUR/USD             1.0817 | 1.0785

EUR/JPY               132.59 | 132.27

AUD/USD            0.7139 | 0.7120

NZD/USD             0.6554 | 0.6537

USD/CAD             1.3296 | 1.3283

EUR/CHF              1.0822 | 1.0804

USD/CHF             1.00185 | 1.0004

GBP/USD             1.5235 | 1.5208

EUR/GBP             0.7100 | 0.7088

For Today

• EUR: The market marked time in the run to Tokyo with the opening around the 1.0815 levels testing into the 1.0805 areas before returning to the opening levels for the Tokyo opening, the Tokyo session saw light selling of EURJPY and Euro’s in general and the market moved down to the 1.0800 level and slipped through quickly testing into the 1.0780 areas before holding around the 1.0790 levels to the grey hours, Topside offers into the 1.0830 areas and the 200DMA around the level and a breach possibly seeing a small short squeeze to the 1.0880-1.0900 levels with the market possibly already built enough to resist a far greater move now and further offers likely then to appear in the 1.0940-60 areas, downside bids are possibly in the 1.0780 areas and then likely to weaken a little before bids start to appear again around the 1.0750 levels and likely to continue through to the 1.0680 areas, a push through the 1.0670 levels will likely see some light stops and the market opening for a further test lower and into the 1.0600 areas.
• GBP: Cable drifted from the opening touching briefly above the 1.5235 levels before moving into the Tokyo session and drifting steadily lower to trade to the 1.5210 areas and into the grey hours. Topside offer into the 1.5250 however, a push through the level will see light offers continuing through to the 1.5300 levels and those offers remaining weak until a push through the 1.5320 levels and opening the topside for a retest above the 1.5400 areas, Downside bids light into the 1.5200 areas with some support through the level before the potential to test the 1.5150 and better strength into the 1.5100 levels,
• JPY: Drifting from the opening the market saw EURJPY selling moving through the market in early trading with the USDJPY drifting to the 122.50 levels from the opening just above before the market saw some interest in USDJPY to push through to the 122.75 areas and stalling, the move while sharp was weak and although the market held for a short time it began to lose momentum and drift back towards the opening levels and remain there for the grey hours. Topside offers light into the 123.00 levels before the market see’s potential to drive back to test those topside offers to the 123.50 levels, light stops likely through the level and then continuing offers are likely through the 124.00 area. Downside bids light through the 122.50 levels and then stronger bids as the market approaches the 122.20-00 areas, a push through the 121.80 levels is likely to cause a break lower and this will lead the market to the previous few months ranges and the market becoming embedded in that range until another set of news items.
• AUD: The Oz remained in a quiet range through the session moving from the 0.7125 levels and slowly pushing towards the 0.7140 however, with no impetus the market was unable to push through the levels and held quietly around the 0.7130-35 levels through the session. Topside offers into the 0.7150-60 areas with light offers from there to the 0.7200-20 area where resistance again stiffens, a push through could see light stops however, the market is likely to be generally offered through to the 0.7260 areas and then increasing in size into the 73 cent levels. Downside bids light through the 0.7100 levels and increasing as the market moves towards the 0.7060 levels with that support likely to continue to the 0.7020 before some weakness appears, a move through the 70 cent level is likely to see stronger bids appearing on each move lower and that strength increasing the closer you move to the 69 cent area.

Overnight News

USD:

Fed’s Fischer Says Waiting to raise, Helped Offset Dollar Harm

Obama to Stress Economic, Military Challenges on Trip: Rice

JPY:

No Point Cutting Cos Tax If That Money Just Gets Piled Up: Aso

CNY:

Further China RRR, Rate Cuts Could Be Helpful: Sec. Times

IDR/CNH:

Indonesia to Boost Renminbi Use in Trade Next Year: Kontan

SGD:

Singapore September Retail Sales +4.6% Y/y; Est. +5.5%

Today’s data

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

JPY         Industrial Production M/M Sep (F) A 1.10% | C   1.00% | P 1.00%

JPY         Tertiary Industry Index M/M Sep A -0.40% | C 0.20% | P 0.10%

06:30     EUR        French GDP Q/Q Q3 (P) C 0.30% | P 0.00%

07:00     EUR        German GDP Q/Q Q3 (P) C 0.30% | P 0.40%

08:15     CHF        Producer & Import Prices M/M Oct C -0.20% | P -0.10%

08:15     CHF        Producer & Import Prices Y/Y Oct P -6.80%

09:00     EUR        Italian GDP Q/Q Q3 (P) C 0.30% | P 0.30%

10:00     EUR        Eurozone Trade Balance (EUR) Sep C 19.4B | P 19.8b

10:00     EUR        Eurozone GDP Q/Q Q3 (A) P 0.40%

13:30     USD       Advance Retail Sales Oct C 0.20% | P 0.10%

13:30     USD       Retail Sales Less Autos Oct C 0.40% | P -0.30%

13:30     USD       PPI M/M Oct C 0.20% | P -0.50%

13:30     USD       PPI Y/Y Oct C -1.20% | P -1.10%

13:30     USD       PPI Core M/M Oct C 0.10% | P -0.30%

13:30     USD       PPI Core Y/Y Oct P 0.80%

15:00     USD       Business Inventories Sep C 0.00% | P 0.00%

15:00    USD       U. of Michigan Confidence Nov (P) C 91 | P 90

Harry Hindsight              

• EUR: Early gains were lost over the Asian session and into the grey hours, the market opened around the 1.0745 areas and pushed steadily through into the Tokyo session to test the 1.0780 levels, the market then slowly drifted back to the opening through the balance of the session and the market was holding the opening levels into the London session, Draghi comments about increasing QE or extending it further than the Sep 16 deadline and the market quickly tested back through the 1.0700 levels and into the 1.0690 before support held and the market traded quietly through to the NYK session, the lows gave the market another chance for the long term USD longs to take some further positions back in with profit taking pushing the Euro back higher quickly and taking out the previous highs to hold above the 1.0780, there was a brief spike through the 1.0800 levels and this triggered a round of selling as market makers were caught holding long positions and slowly covered to the 1.0750 levels, the next run was less frantic however, the result was the same with the market halting just above 1.0800 and it took a third move to actually break through to trigger weak stops to the 1.0830 levels however, the move was late in the session and the momentum was lost and the market then drifted back to finish the day above the 1.0800 level.
• GBP: Having rose to the 1.5245 levels into the Tokyo session the market was unable to press ahead and drifted into the London opening eventually dipping through the opening 1.5215 levels and then dropping on the official opening to trade quickly to the 1.5175 areas before holding for the bulk of the London session around the 1.5185 areas, the move into the NYK session saw the market quickly rise as USD sellers took advantage and the Cable quickly moved back towards the highs and the next couple of hours were reasonably choppy if contained by the day’s range moving quietly to the close around the 1.5235 levels.
• JPY: USDJPKY traded through the Asian session testing through the 123.00 levels but never with any true strength peaking on each rally around the 123.05 levels and spending much of the session trading around the 122.90-123.00 until the NYK session saw the market drop back to test the 122.70 levels, as with the other markets the trading was choppy but contained however, the USDJPY did test lower each time as the profit taking continued through the NYK session and the USDJPY slowly pushed towards the 122.50 areas with weak stops being absorbed by the bounces along the way.
• AUD: The big mover of the day with the market opening around the 0.7060 levels and testing to the 0.7070 before the employment data was released, the data was strong and the market quickly moved to the 0.7140 levels before slowing, the market spent some time moving through the 0.7150 levels however, it was unable to make any more headway and held through into London trading the 0.7140 areas, the move towards the NYK session saw quick selling move in with expectations of a return to the previous levels however, with USD profit taking the story for the session saw the market bounce back above the 0.7130 areas from the 0.7090 and then steadily trading to the close around that level.

Yesterday’s premiership results

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

NZD       Business NZ Manufacturing Index Oct A 53.3 | P 55.4

JPY         Domestic CGPI Y/Y Oct A -3.80% | C -3.50% | P -3.90% | R -4.00%

JPY         Machine Orders M/M Sep A 7.50% | C 3.40% | P -5.70%

AUD       Consumer Inflation Expectation Nov A 3.50% | P 3.50%

GBP       RICS House Price Balance Oct A 49% | C 46% | P 44%

AUD       Employment Change Oct A 58.6K | C 15.2K | P -5.1K | R -0.8K

AUD       Unemployment Rate Oct A 5.90% | C 6.20% | P 6.20%

EUR        German CPI M/M Oct (F) A 0.00% | C 0.00% | P 0.00%

EUR        German CPI Y/Y Oct (F) A 0.30% | C 0.30% | P 0.30%

EUR        Eurozone Industrial Production M/M Sep A -0.30% | C -0.10% | P -0.50% | R -0.40%

USD       Initial Jobless Claims (NOV 7) A 276K | C 270K | P 276K

CAD       New Housing Price Index M/M Sep A 0.10% | C 0.20% | P 0.30%

USD       Crude Oil Inventories A 4.2M | C 1.0M | P 2.8M

USD       Monthly Budget Statement Oct A -136.5B | C -130.2B | P 91.1B

 

Good Luck,

Andy

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