Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 108.823 | EURUSD 1.13135 | AUDUSD 0.77497 | NZDUSD 0.69446 | USDCAD 1.27847 | USDCHF 0.96435 | GBPUSD 1.42776 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13263 | 1.13036

USDJPY                 109.220 | 108.784

GBPUSD               1.43156 | 1.42704

AUDUSD              0.77842 | 0.77476

USDCHF               0.96494 | 0.96316

USDCAD               1.28000 | 1.27600

NZDUSD               0.70056 | 0.69477

EURGBP               0.79258 | 0.79100

EURJPY                 123.577 | 123.080

EURCHF                1.09134 | 1.09002

 

For Today

• EUR: A slow nervous start to the day with the market drifting from the opening around the 1.1310 level towards the 1.1300 areas before Tokyo moved in and once the RBA announcement was released and the Euro started to edge steadily higher pushing eventually through to the 1.1325 levels before holding steady into the grey hour, Topside offers are likely to continue lightly through to the 1.1350 levels and then congestion from there onwards are likely to limit any quick moves higher with the next big figure range being well traded over the first couple of weeks of the month, stops are likely once the market breaks through the 1.1460 levels and opens topside weakness through the 1.1500 levels. Downside bids light through the 1.1300 levels and stronger bids are likely to continue through the 1.1280 levels and into the 1.1240 area before the likelihood of any weak stops, and a test to the 1.1220-00 areas which is possibly limited with better bids into the 1.1160 areas.
• GBP: Quiet from the opening and then the move into the Tokyo session saw the Cable steadily rising to push through the 1.4300 levels and struggling to just below the 1.4320 levels, Topside light offers through to the 1.4350 levels and possibly slightly better before the market opens up with weak stops possible on a push through the 1.4400 levels and further offers into the 1.4450 area, no data for the UK and only limited numbers on the day. Downside bids well penetrated and likely to be weak on the sentimental levels until pushing through the 1.4150 levels where the bids are likely to become a little stronger especially on any attempt through the 1.4100 levels.
• JPY: The USDJPY moved from the opening 108.80 areas and drifted lightly higher into the Tokyo session before the market lifted quickly through to test the 109.20 levels and then drift around the 109.00-20 areas for the session, Light offers into the 109.20 levels are likely to disappear quickly however, there is still likely to be some strong offers on a move through to the 109.50 level before weak stops and better offers through the 109.80 levels and through the 110.00 level, however, if the market can find the impetus those stops are likely to open up a quick test through to the 111.00 levels. Downside bids through the 108.50 levels and likely to increase on an attempt to push back through the 108.00 level and the 107.70-60 areas likely to see weak stops joined by break out stops and weakness quickly appearing for a move below the 107.00 levels.
• AUD: The Oz has tested slowly higher through the session, moving from the opening 0.7750 levels and pushing repeatedly above the 0.7780 levels and possibly running into option barriers and holding in the areas for several hours, RBA announcement was unchanged and did little to deflect the market, Topside offers from the current highs and likely to continue through the 78 cent levels, with the topisde seeing light offers into the 0.7840-60 areas and the market likely to open to the 80 cent level and stops appearing on any move. Downside light through the 77 cent levels as the market readjusts to the current levels, a push through sees light bids into the 0.7680 areas and then the market opening to the 0.7640 and possibly stronger bids and a struggle to the 0.7620 areas.

Overnight News

JPY:

Aso: Will Take Various Measures on Abruptly Strong Or Weak Yen

Japan Picks FX Expert to Help Oversee BOJ’s Negative-Rate Plunge

USD:

Fed’s Rosengren Challenges ‘Very Shallow’ Rate Path Seen by Markets

CNY:

IMF’s Zhu Says China Shouldn’t Swap Bad Debt for Equity: News

AUD:

RBA: Very Accommodative Policy Appropriate; Says Scope to Ease

Australia ANZ Weekly Consumer Confidence Rises 3.4% to 115.8

Turnbull Says He’ll Seek July 2 Election After Announcing Budget

NZD:

New Zealand Services Grew at Slowest Pace in 16 Months in March

Today’s data

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

01:30     AUD       RBA Minutes

08:00     EUR        Eurozone Current Account (EUR) Feb C 21.3B | P 25.4B

09:00     EUR        German ZEW (Economic Sentiment) Apr C 8 | P 4.3

09:00     EUR        German ZEW (Current Situation) Apr C 51 | P 50.7

09:00     EUR        Eurozone ZEW (Economic Sentiment) Apr C 13.9 | P 10.6

12:30     USD       Housing Starts Mar C 1.17M | P 1.18M

12:30    USD       Building Permits Mar C 1.20M | P 1.17M

Harry Hindsight              

• EUR: The Euro opened a little higher around the 1.1300 levels as the USD weakened broadly against the non-commodity currencies, trading into the Tokyo session and testing to the 1.1280 levels into the London opening, the market failed the downside eventually and moved quickly higher back to the 1.1300 levels, the market from then was limited at best with the market struggling into the NYK session eventually testing to the 1.1320 levels and the market really dominated by the movement of commodity currencies throughout the day, as the London session finished the market posted its highs briefly pushing through the 1.1330 levels before drifting to the close to the 1.1310 levels.
• GBP: Cable opened only slightly off from Fridays close and drifted through the session from the opening just below 1.4200 levels and testing into the London opening through the 1.4140 levels before London started a steady round of buying to force the market back to the 1.4200 levels in early trading, with the Oil market and commodity currencies doing the work for the day, as the London session moved towards the close, as the Oil markets improved from the low opening so did the markets start to change with the Commodity currency weakness regaining some strength and the Cable was little different and the move through to fill the gap on the charts and the break of the 1.4200 saw a quick rise continuing through to the 1.4280 levels and into waiting offers, and the market stayed around that level to the close.
• JPY: USDJPY opened around the 108.20 levels and early trading saw the market attempting to push towards the 108.50 levels before Tokyo opened and the sellers appeared as limited movement to the JPY ensued and the market tested through the 108.00 levels in fairly active trading, the market then struggled off the 107.80 levels into the London session before the Oil market started to recover and the USDJPY steadily started to rise again to the 108.50 areas, the move into the NYK session saw USDJPY buying increasing and the push through the 108.50 levels saw light stops helping the market to the 108.80 and eventually through to test towards the 109.00 levels before holding and trading in quiet end of day movement around the 108.80 levels.
• AUD: Oz and CAD in particular suffered the most on the opening with the Oz some 60 pips lower and trading quietly from the opening before dipping into the Tokyo session testing to the 0.7630 levels before recovering to the opening levels again, London tested through the 0.7650 levels before a long steady rally ensued and the market filled the gap on the charts to the 0.7720 areas into the NYK session, the continuing improvement in the Oil markets saw NYK test the topside to the 0.7750 levels and a long steady movement into the close holding around that level.

Yesterday’s premiership results

NZD       CPI Q/Q Q1 A 0.20% | C 0.10% | P -0.50%

GBP       Rightmove House Prices M/M Apr A 1.30% | P 1.30%

CAD       Intl Securities Transactions (CAD) Feb A 15.94B | C 7.52B | P 13.51B | R 11.41B

USD       NAHB Housing Market Index Apr A 58 | C 59 | P 58

Good Luck,

Andy

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