Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.203 | EURUSD 1.12684 | AUDUSD 0.77152 | NZDUSD 0.68458 | USDCAD 1.26774 | USDCHF 0.97511 | GBPUSD 1.4482 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12758 | 1.12603

USDJPY                 111.286 | 110.853

GBPUSD               1.45096 | 1.44778

AUDUSD              0.77246 | 0.77078

USDCHF               0.97550 | 0.97426

USDCAD               1.26842 | 1.26614

NZDUSD               0.68884 | 0.68567

EURGBP               0.77826 | 0.77662

EURJPY                 125.380 | 124.936

EURCHF                1.09875 | 1.09792

 

For Today

• EUR: We thought yesterday was quiet well today beats it easily with one of the quietest sessions of the year, Euro’s dipped slightly into the end of the session and grey hour having struggled through the session holding around the 1.1265-70 levels testing briefly above into the 1.1275 levels, towards the end of the session light Euro selling across the board saw the market testing into the 1.1260 levels, Topside offers into the 1.1280 levels are light and with only durable goods in the US of note those offers are likely to continue through the 1.1300 levels and into 1.1330 before any weakness begins to show, weak stops then light offers to the 1.1380 level area and better offers from then on. Downside bids are limited until the 1.1220 levels and those bids are likely to extend to the 1.1180 areas with only a little weakness into the 1.1150 areas and some bids continuing from there into the 1.1100 level.
• GBP: Cable remained in touch with the 1.4500 level for the most part rising from the opening 1.4480 areas and testing towards the 1.4510 level before holding for several hours and then weakening as a news article about a challenge from Brussels on toll payments for foreign trucks being unfair, against the UK who levy a road tax against its own vehicles registered, seems fair to me. The market then slipped back below the 1.4500 and has held in the 1.4490 levels for the balance of the session into the grey hour, Topside offers into the 1.4520 levels remain broadly intact and adding to which the chance of day traders fading any move to the level, a push through will see offers into the 1.4550 areas however, the market to the 1.4600 level does begin to look vulnerable. Downside bids light through to the 1.4400 levels and the chance of the market breaking back below the level opens the possibility of stops appearing and the 1.4350 levels being rather weak.
• JPY: As with yesterday the market flirted with the 110.90 levels however, it generally remained in line with the post Asian market of yesterday and traded in a tight 111.20-110.90 levels for the most part, Topside offers into the 111.80 levels are likely to be fairly strong with the market underpinned by real money buyers of the USD in the Futures and forwards, a break through the 112.50 levels is likely leave the market vulnerable to further gains with the 113.00 level looking weak at the moment. Downside bids through to the 110.80 areas are likely to be of note however, a breach of the level will open the market to a move back onto the 109 handle with bids around the 109.50 areas.
• AUD: Similar story for the Oz as yesterday and the market waits for this week’s data from tomorrow onwards with plenty of potential and no real willingness to do much before those releases, testing to the 0.7725 levels the market drifted back off having again failed the attempt but remaining above the 77 cent area. Topside offers likely from the 0.7740 areas and the current highs are likely to be just limited offers a push through the 0.7760-70 areas again opens up the 78 cent however, for the moment everything rests on the US numbers for another quiet day. Downside bids into the 0.7680 areas have not been truly tested and a break through to the 0.7640 levels is likely to open the 76 cent level for a strong test with congestion around the level needing to be cleared before any further downward pressure opens up the stronger 75 cent level.

Overnight News

JPY:

Abe’s Aide Honda Wants BOJ to Ease in 1st Half of This Year

Japan’s GPIF to Embrace Currency Hedging, Nikkei Says

Abe Adviser Honda Says BOJ May Not Ease This Week: WSJ (Yday)

BOJ Shouldn’t Add Stimulus Now, Ex-Board Member Nakahara Says

NZD:

RBNZ Should Leave Cash Rate at 2.25% This Week: Shadow Board

CNY:

China Economy Yet to Hit Bottom of U-Turn: Former PBOC Adviser

China Approves IMF, ADB as Interbank Forex Market Members

SGD:

Singapore March Factory Output -0.5% Y/y; Est. -2%

 

Today’s data

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

08:30     GBP       BBA Mortgage Approvals Mar C 46.1K | P 45.9K

12:30     USD       Durable Goods Orders Mar (P) C 1.90% | P -3.00%

12:30     USD       Durables Ex Transportation Mar (P) C 0.60% | P -1.30%

13:00     USD       S&P/Case-Shiller Composite-20 Y/Y Feb C 5.50% | P 5.80%

14:00     USD       Consumer Confidence Apr C 95.8 | P 96.2

Harry Hindsight              

• EUR: With Oz and NZD out for ANZAC day the market struggled through the Asian session and indeed through the day, with the Euro edging steadily higher through the day, having opened around the 1.1220 areas the market made its way to highs just below the 1.1280 levels and held in a tight channel throughout. German IFO numbers were weaker and only saw weak selling.
• GBP: A mixed day for the Cable, with the market opening higher on the opening and then spending the Asian session retracing from the 1.4460-70 areas to test into the 1.4410 areas and filling the gap on the chart, slightly better than expected total orders for April saw the market moving a little higher and NYK took the market to last month’s highs through the 1.4500 levels before finding sufficient offers to deflect the rally, the market continued to range around the 1.4500-1.4470 levels to the close before closing into a tight range and finishing around the 1.4480 levels.
• JPY: USDJPY opened around the 111.80 levels and dropped sharply from the opening in Tokyo falling back to the 111.50 levels and then continuing the move in a tight channel through to Tokyo lunch before finding some respite and ranging into the London session along the 110.10-30 levels and into the NYK session, quick selling again on the opening there saw the lows posted into the 110.80’s before the market again settled down to trade in a tight range to the close.
• AUD: The Oz was limited with ANZAC day, with the market holding through the Asian session around the 77cent levels and then finding light opening buyers into the London session, early lows below the 0.7695 areas held throughout the day and the market was unable to push much beyond the 0.7725 levels with several lacklustre attempts through the London and NYK sessions, the market drifted from those highs late into the session and settled down in to the close to finish a little higher than the opening.

Yesterday’s premiership results

JPY         Corporate Service Price Y/Y Mar A 0.20% | C 0.20% | P 0.20%

EUR        German IFO – Business Climate Apr A 106.6 | C 107.1 | P 106.7

EUR        German IFO – Current Assessment Apr A 113.2 | C 113.8 | P 113.8

EUR        German IFO – Expectations Apr A 100.4 | C 100.9 | P 100

GBP       CBI Trends Total Orders Apr A -11 | C -17 | P -14

USD       New Home Sales Mar A 511K | C 521K | P 512K | R 519K

Good Luck,

Andy

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