Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 106.409 | EURUSD 1.15339 | AUDUSD 0.76684 | NZDUSD 0.70111 | USDCAD 1.25297 | USDCHF 0.95444 | GBPUSD 1.46739 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.15419 | 1.15207

USDJPY                 106.466 | 105.937

GBPUSD               1.46873 | 1.46600

AUDUSD              0.77241 | 0.75560

USDCHF               0.95525 | 0.95370

USDCAD               1.25353 | 1.25016

NZDUSD               0.70533 | 0.69839

EURGBP               0.78671 | 0.78519

EURJPY                 122.755 | 122.157

EURCHF                1.10098 | 1.10016

 

For Today

• EUR: A quiet session again for the most part with the Euro trading quietly around the 1.1530 levels, touching above the 1.1540 level before slipping back a little after the RBA announcement to again test the early 1.1520 lows, Topside offers into the 1.1580 levels are likely to be a little weaker than normal and a push through the 1.1600 areas should open to better offers around the 1.1640-60 areas with topside targets opening to the 1.2000 levels from then on. Downside bids light through to the 1.1480 areas with weak stops likely below the area and the market then finding only limited bids into the 1.1460-40 area, and the light bids continuing through to the 1.1400 levels and opening a possible opening for another big figure.
• GBP: Quiet start for Cable with buying moving higher into the Tokyo session to test the 1.4685 levels before the RBA announcement saw the cross/Oz moving higher but not strong enough to hold the other currencies in place and the Cable dipped back towards the 1.4660 opening levels. Topside offers light into the 1.4700 areas a breakthrough will likely see weak offers into the 1.4770 areas and then stronger offers as the market tries to move through the 1.4800 level, Downside bids likely to be light through the 1.4600 areas and then the market opening for a better run low towards the 1.4500 level and continuing weak bids.
• JPY: USDJPY moved into the Tokyo session holding the 106.40 opening areas, before selling appeared with nervousness in the AUDJPY contributing to the selling and the market dipping back to the 106.10 areas before ranging quietly around the 106.20 areas until the RBA release, as with the other pairs the movement of the Oz saw the JPY strengthen and the USDJPY dip below the 106.00 levels and holding the 105.90 levels. Topside offers into the 106.80 are likely to have increased after the recent failures and weak stops through the 107.20 areas to open a test to the 108.00 levels and probably the strongest point for the moment, downside bids likely into the 105.20 level and likely weaker through the level and stops then likely to appear on a move through and exposing the 2014 ranges around the 102-104 areas.
• AUD: The market opened around the 0.7660 levels and gradually started to trade higher through the Tokyo session with the market split on the RBA’s coming announcement with the majority focused on no changed for the day, the announcement of a 25bp cut saw the market drop from the 0.7720 highs and gap to the 0.7650 levels and then trade quickly lower to the 0.7560 areas before finding sufficient interest to hold the market in place. Topside offers open to the 0.7660 levels with possible light offers and the market open to a short squeeze, downside bids into the 0.7560-40 areas supporting the market for the moment and a push here will expose weak bids into the 75 cent levels, beyond will see some light stops likely to appear and a medium term view of the beginning of the year ranges.

Overnight News

AUD: RBA’s Stevens Cuts Benchmark Interest Rate to 1.75% (Full Text)

Australia March Building Approvals Rise 3.7% M/M; Est. 2% Fall

Australia ANZ Weekly Consumer Confidence Rises 2.0% to 113.9

CNY:

Caixin China April Manufacturing PMI 49.4; Est. 49.8

JPY:

Abe to Decide on Sales Tax Hike After May G-7 Summit: Nikkei

Japan Exporters May Take JPY1t Hit From Rising Yen: Nikkei

BOJ’s Kuroda: Strong Yen Can Have Unwelcome Effect on Economy

IMF:

IMF Sees Rising Debt Challenge as Asia Stays Global Outperformer

USD:

Obama: TPP Would Let America, Not China, Lead on Trade

Fed’s Williams Says Drawing Lines on Regulation Is a Challenge

 

Today’s data

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

AUD       Building Approvals M/M Mar A 3.70% | C -1.80% | P 3.10% | R 2.90%

CNY        Caixin PMI Manufacturing Apr A 49.4 | C 49.9 | P 49.7

AUD       RBA Rate Decision A 1.75% | C 2.00% | P 2.00%

05:45     CHF        SECO Consumer Confidence Apr C -12 | P -14

08:30     GBP       PMI Manufacturing Apr C 51.3 | P 51

09:00     EUR        Eurozone PPI M/M Mar C 0.10% | P -0.70%

09:00     EUR        Eurozone PPI Y/Y Mar P -4.20%

Harry Hindsight              

• EUR: Opening slightly higher than the close on Friday, with several areas out for Bank holiday the markets volumes were limited however, the Euro continued its steady rise higher pushing to the 1.1480 levels into the Asian session before slipping back through the opening 1.1460 levels to fill the gap on the charts and basing around the 1.1450 levels, mixed PMI numbers in Europe were able to push the market back higher however, the market again struggled into the 1.1480 levels before the NYK session, NYK had sufficient interest to push the market higher and the break through the 1.1500 levels saw a quick spike into the 1.1530 levels before settling down to trade the areas into the close.
• GBP: Cable moved quietly higher through the Asian session testing to the 1.4630 levels from the opening 1.4590 levels. The move towards the NYK session saw a strong movement higher to quickly run towards the 1.4700 with a lack of liquidity because of the UK bank holiday before settling down to trade around the 1.4670 levels as the market tightened to that close.
• JPY: USDJPY opened around the 106.30 levels and ranged through the day around the 106.50 with early buyers into Tokyo struggling around the 106.70 levels and then making the lows into the full session just above the 106.10 area, the day stayed for the most part in that range until deep into the NYK session and 106.80 was tested before returning to its quiet range.
• AUD: As with most of the market Oz headed quietly higher through the session with China, HK and several other Asian countries out for the day, moving from the opening 76 cent levels the move into the UK holiday session saw the Oz rise steadily to the 0.7650 levels before moving into the NYK session and after early selling the market returned to the highs and pressed to the 0.7670 levels into the close.

Yesterday’s premiership results

AUD       TD Securities Inflation M/M Apr A 0.10% | P 0.00%

AUD       NAB Business Confidence Apr A 5 | P 6

CHF        Retail Sales (Real) Y/Y Mar A -1.30% | C 0.30% | P -0.20%

CHF        SVME PMI Apr A 54.7 | C 53.6 | P 53.2

EUR        Germany Manufacturing PMI Apr (F) A 51.8 | C 51.9 | P 51.9

EUR        Eurozone Manufacturing PMI Apr (F) A 51.7 | C 51.5 | P 51.5

USD       ISM Manufacturing Apr A 50.8 | C 51.6 | P 51.8

USD       ISM Prices Paid Apr A 59 | C 51 | P 51.5

USD       Construction Spending M/M Mar A 0.30% | C 0.50% | P -0.50% | R 1.00%

Good Luck,

Andy

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