Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 107.12 | EURUSD 1.13162 | AUDUSD 0.74314 | NZDUSD 0.71355 | USDCAD 1.27216 | USDCHF 0.96457 | GBPUSD 1.44572 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13202 | 1.12896

USDJPY                 107.262 | 106.909

GBPUSD               1.44660 | 1.44412

AUDUSD              0.74373 | 0.74078

USDCHF               0.96532 | 0.96383

USDCAD               1.27436 | 1.27143

NZDUSD               0.71238 | 0.70892

EURGBP               0.78382 | 0.78152

EURJPY                 121.192 | 120.805

EURCHF                1.09137 | 1.08960

 

For Today

• EUR: A quiet session through to the Tokyo session with the market holding around the 1.1315 levels testing initially to the 1.1320 areas before moving into the new session and quickly testing through the 1.1300 areas to the 1.1290’s and then holding a tight range around the 1.1300 levels into the London market. Topside offers likely to find light offers through the 1.1340 areas with those light offers likely to see weak stops through the level and the 1.1400-20 areas become vulnerable for a further test, however, with a lack of data for the day the market is likely to be quiet but a push through the 1.1420 areas will likely be a weaker move than the first attempt and the 1.1480 area is likely a stronger resistance level. Downside bids to the 1.1280 areas and the market is likely to see stops appearing through the 1.1270 areas and the opening for a renewed test through the 1.1200 areas.
• GBP: Cable having made it back towards the ranges from the Asian session saw quick selling back to the previous day’s lows to press the 1.4450 areas into the Tokyo session, Tokyo was unable to do much with the GBP and the market held broadly in the 1.4450-60 areas into the London. Topside offers into the 1.4500-30 areas and without little data the market is likely to be reliant on Brexit commentary for movement and continue in its more than volatile patterns, a push through those offers above the 1.4500 areas would see further congestion to the 1.4550 areas and continuing through the 1.4600 levels. Downside bids into the current levels still attracting bids however a strong push through the area will likely see a similar pattern to the 1.4400 before the market opens to a deeper move with only light interest to the downside.
• JPY: USDJPY opened quietly and traded in a very narrow range through the session opening around the 107.10 areas the market initially dipped through to the 107.00 areas and into the 106.90’s before early Tokyo started some quiet buying to move it back above, the market continued to trade in this fashion through to the London session with brief movements above the 107.20 levels and unable to push cleanly through the 107.00 levels. Topside offers likely through the 107.20 areas and continuing through to the 107.50 areas before an opening appears with slight weakness in front of the stronger offers through the 107.80 areas through the 108.00 with weak stops likely to appear in the market and the market likely to see very little to hold the market until through the 108.50 areas and increasing to the 109.00 levels, downside bids through to the 106.50 areas and likely to again be strong with importer bids willing to pick up the support and possible interest from foreign asset buyers moving into the market however, a clear break of the 106.00 levels does open the market a little to test the lows from May and a return to the 2014 ranges 102-104.
• AUD: A quiet day for the Oz with early trading around the 0.7425-35 areas seeing weak selling in the AUDJPY carry with Oz dipping back to the 0.7410 areas and pressing against the level continually through the session. Topside offers through the 0.7450 areas are likely to be weak and the offers on the topside increase into the 75 cent levels the market failure yesterday could be key to any movement to that level. Downside bids likely to see weak stops on a move through light offers through 74 cent and the market sees only marginal bids through the mid 73 cent areas as a sentimental area and the 73 cent is open from there.

Overnight News

Equity:

Stock markets across the Asian region under pressure

Today’s data

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

JPY         Domestic CGPI Y/Y May A -4.20% | C -4.20% | P -4.20%

JPY         Tertiary Industry Index M/M Apr A 1.40% | C 0.70% | P -0.70%

06:00     EUR        German CPI M/M May (F) C 0.30% | P 0.30%

06:00     EUR        German CPI Y/Y May (F) C 0.10% | P 0.10%

12:30     CAD       Net Change in Employment May C 1.1K | P -2.1K

12:30     CAD       Unemployment Rate May C 7.10% | P 7.10%

14:00    USD       U. of Michigan Confidence Jun (P) C 94.1 | P 94.7

Harry Hindsight              

• EUR: The Euro tested a little higher through a quiet Asian session unable to push much beyond the previous day’s highs around the 1.1410 levels before moving back into the opening levels into the London session and dropping back with the release of better UK Trade balance numbers, with strong EURGBP selling moving into the market and the Euro forced back to the 1.1350 levels in early trading, the market continued to drift through into the NYK session and then continued the move with the USD taking over from the GBP as the mover against the Euro. With the market drifting and pushing through to mid NYK to trade below the 1.1310 areas before finding some light support and a range to the 1.1330 levels to the close.
• GBP: Cable held through the Asian session along the 1.4500 levels for the most part testing lightly through the 1.4520 areas into the London session to make the highs the move into the London session saw the market make highs and then reject the levels and drop quickly back into the 1.4450 areas with the and holding that base line until the close, the NYK session saw the market move back to the 1.4500 levels however, the session while calmer than the Euro still had the Brexit limitations tattooed all over it and the market was stuck in a tight range to the close even after a strong set of numbers yesterday and a decent trade balance number for the month.
• JPY: Early USD weakness against the JPY through the Asian session saw the market dip from the 107.00 levels and trade into the 106.50 levels before finding some limited support through to the London session, decent numbers in the UK saw GBPJPY buying moving in however, this was tempered by strong Euro selling and the EURJPY was forced lower taking the USDJPY to the 106.30 levels before finding sufficient bids to hold the market through to the NYK session, once the London market closed the USD started a limited recovery and pushed through to the 106.90 areas with weak stops triggered on the move back through the 107.00 areas and the market tested to the 107.20 areas before running out of time into the close.
• AUD: Opening higher from the RBNZ rate decision the Oz moved from the 0.7490 areas and pushed into the Tokyo session pushing through the 75 cent levels but having attempted the topside a couple of times the market started a quiet and steady decline through the session to push through to the London opening back to the closing levels in NYK, the London session saw a stronger USD appearing as the market digested the UK numbers and the Brexit talk and the USD continued to move against the rest of the market and Oz drifted to the 0.7420 areas before holding quietly through the NYK session in a tight range and rising only slightly towards the 0.7450 areas into the close.

Yesterday’s premiership results

NZD       RBNZ Rate Decision A 2.25% | C 2.00% | P 2.25%

GBP       RICS House Price Balance May A 19% | C 36% | P 41% | R 39%

JPY         Machine Orders M/M Apr A -11.00% | C -3.20% | P 5.50%

JPY         Japan Money Stock M2+CD Y/Y May A 3.40% | C 3.30% | P 3.30% | R 3.40%

CNY        CPI Y/Y May A 2.00% | C 2.30% | P 2.30%

CNY        Producer Price Index Y/Y May A -2.80% | C -3.20% | P -3.40%

0CHF      Unemployment Rate May A 3.50% | C 3.50% | P 3.50%

0JPY       Machine Tool Orders Y/Y May (P) A -25.00% | P -26.30%

EUR        German Trade Balance (EUR) Apr A 24.0B | C 21.4B | P 23.6B | R 23.7B

GBP       Visible Trade Balance (GBP) Apr A -10.5B | C -11.1B | P -11.2B | R -10.6B

USD       Initial Jobless Claims (JUN 4) A 264K | C 270K | P 267K | R 268K

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

USD       Wholesale Inventories Apr A 0.60% | C 0.00% | P 0.10% | R 0.20%

USD       Natural Gas Storage A 65B | C 80B | P 82B

Good Luck,

Andy

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