Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.763 | EURUSD 1.11934 | AUDUSD 0.72254 | NZDUSD 0.67428 | USDCAD 1.29767 | USDCHF 0.98937 | GBPUSD 1.46704 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.12000 | 1.11834

USDJPY                 110.007 | 109.572

GBPUSD               1.46826 | 1.46579

AUDUSD              0.72345 | 0.72152

USDCHF               0.98990 | 0.98863

USDCAD               1.29997 | 1.29713

NZDUSD               0.67588 | 0.67394

EURGBP               0.76362 | 0.76218

EURJPY                 123.093 | 122.670

EURCHF                1.10756 | 1.10682

 

For Today

• EUR: A reasonably quiet session with limited impact from the CPI numbers in Tokyo and the market holding quietly around the 1.1190 areas having tested towards the 1.1200 levels early in the session, Topside offers through to the 1.1220 levels and possibly increasing though to the 1.1250 areas before weakness starts to appear and the 1.1300 levels become vulnerable. Downside bids light through to the 1.1150 areas with better bids appearing in the area with weak stops likely on a move through 1.1140 areas and 1.1100 becoming the limited target.
• GBP: Cable saw limited range testing the 1.4660 levels in early trading before testing towards the 1.4680 levels as EURGBP selling tested a little lower, the market has continued to trade around the mid-range from then on and into the London session. Topside offers light through the 1.4700 levels increasing as the market moves beyond the 1.4750 levels and likely to see weak stops on a strong break, these stops could see another squeeze towards the 1.4800 levels however, good offers are likely to appear above the highs from the beginning of the month. Downside bids light through the 1.4600 levels with likely weak stops on a move through the level and then better bids as the market approaches the 1.4450 levels and beyond.
• JPY: Limited recovery early into the Tokyo session with buyers taking the market from the 109.60 areas to touch the 110.00 area before drifting off to mid range as the market moved into the lunch period, Topside offers light through to the 110.00 areas with weak stops likely to be spread above the 110.20 areas and the 110.50 level and the market to 111.00 becoming vulnerable if the market can push through the areas, however, from then on the market is likely to see increasing offers on a move through the 111.00 level and into the 111.50 area and then further stronger offers at a push towards 112.00, Downside bids into the 109.20-109.00 levels sees congestion on a push through the level and the market possibly struggling into bids deep through to the 108.50 areas which is likely to be key to any further losses.
• AUD: A very quiet session for the Oz with the market trading for the most part between the 0.7220-30 areas with only a light move through the downside, Topside offers through the 0.7240-60 areas will likely see stronger offers appearing around the 0.7300 areas and continuing lightly to the 0.7350 area, Downside bids light through the 72 cent levels and better bids are likely in any move to test the 0.7150 areas and continuing in the same fashion through to the 71 cent level.

Overnight News

JPY:

CPI ex fresh food rises 0.9% YoY

Fitch see’s Japan life insurers raising foreign bond investments

Today’s data

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

GBP       GfK Consumer Confidence May A -1 | C -4 | P -3

JPY         National CPI Core Y/Y Apr A -0.30% | C -0.30% | P -0.30%

JPY         Tokyo CPI Core Y/Y May A -0.50% | C -0.40% | P -0.30%

12:30     USD       GDP (Annualized) Q1 (S) C 0.90% | P 0.50%

12:30     USD       GDP Price Index Q1 (S) C 0.70% | P 0.70%

14:00    USD       U. of Michigan Confidence (MAY F) C 95.9 | P 95.8

Harry Hindsight              

• EUR: A quiet open saw the market drift to the 1.1150 levels before Tokyo USD selling kicked in and the Euro started a steady rise to push through to the 1.1180 levels and into the London session holding around that level, London were light sellers however, the market held in a narrow range through to the NYK session with the market moving off the 1.1170 levels to push quickly to the 1.1215 area with the release of good USD numbers however, the market did return to the previous levels and then slowly move to the close around the 1.1190 levels.
• GBP: Opening above the 1.4700 levels the market pushed through the to the London session to the 1.4720 levels in quiet trading for the Cable with the Euro buying dragging the Cable higher, the move into the London session saw the market spiking higher to the 1.4740 levels on the release of the UK numbers with GDP in line with expectations and quick buying, the move through the balance of the session saw the market drift back to the 1.4720 levels and EURGBP buying moving quickly in to tip the Cable lower and the market seeing weak stops back through the 1.4700 levels and then holding around that level through deep into the NYK, as the London market came to the end of the day Cable dropped further to test to the 1.4650 levels before slowly rising back to the 1.4670 levels to the close.
• JPY: USDJPY opened around the 110.20 levels before quickly dropping back to the 109.50 areas into the Tokyo session, no apparent news or data to help explain the movement and the selling saw quick to suggest a large ticket moving through before holding around the 109.70 levels through into the London session, before cross buying in EURJPY saw the USDJPY again testing the 110.00 levels touching the 110.20 levels as the release of the USD numbers initially testing higher before dropping quickly lower and another probe towards the 109.50 levels, the market then calmed and ranged around the 109.70 to the close.
• AUD: The market ranged quietly higher through the session, with a dramatic fall of 5.2% Business investments saw the Oz quickly test the 0.7160 levels before recovering and squeezing higher as the USD continued to move lower, testing from the lows to hold through to the London session trading around the 0.7210 level, London were light sellers into the 72 cent levels however, USD weakness continued through the session with the Oz eventually testing the 0.7240 areas before drifting to a close around the 0.7220 level.

Yesterday’s premiership results

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

GBP       BBA Mortgage Approvals Apr A 40.1K | C 44.8K | P 45.1K | R 43.9K

GBP       GDP Q/Q Q1 (P) A 0.40% | C 0.40% | P 0.40%

GBP       Index of Services 3M/3M Mar A 0.60% | C 0.60% | P 0.70% | R 0.80%

GBP       Total Business Investment Q/Q Q1 (P) A -0.50% | C 3.20% | P -2.00%

USD       Initial Jobless Claims (MAY 21) A 268K | C 275K | P 278K

USD       Durable Goods Orders Apr (P) A 3.40% | C 0.30% | P 0.80% | R 1.90%

USD       Durables Ex Transportation Apr (P) A 0.40% | C 0.10% | P -0.20% | R 0.10%

USD       Pending Home Sales M/M Apr A 5.10% | C 0.60% | P 1.40% | R 1.60%

Good Luck,

Andy

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