Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 100.242 | EURUSD 1.13053 | AUDUSD 0.76152 | NZDUSD 0.73025 | USDCAD 1.29137 | USDCHF 0.96308 | GBPUSD 1.31977 |

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.13117 | 1.12933

USDJPY                 100.531 | 100.199

GBPUSD               1.32055 | 1.31728

AUDUSD              0.76179 | 0.76004

USDCHF               0.96442 | 0.96270

USDCAD               1.29337 | 1.29150

NZDUSD               0.72955 | 0.72694

EURGBP               0.85776 | 0.85628

EURJPY                 113.592 | 113.279

EURCHF                1.08922 | 1.08865

 

For Today

• EUR: A very quiet session with the market contained in a tight range trading around the 1.1300 areas for the most part and heading into the London session holding below the figure area, no real news to alter the market for the moment, topside offers likely to be again in the 1.1340-60 areas with only a brief area of light offers before the stronger 1.1400 area appears with light option barriers suspected into the level, through the 1.1420 areas weak stops are likely and then the market is again dominated by strong offers. Downside bids light through to the 1.1280 areas and then bids are likely to be a little stronger however, a push through the 1.1270 areas is likely to see weak stops appearing and the market possibly testing quickly to the 1.1220 areas before firmer bids again appear.
• GBP: Unable to push cleanly through the 1.3200 areas the market moved into the Tokyo session holding around the figure area before light selling moved in taking the market down into the 1.3170 areas and holding around the 1.3180 level for much of the session on light trading. Topside offers for the moment through the 1.3200 levels, with plenty of congestion through to the 1.3220 areas likely to stand in the way of a clear run higher however, through the level is likely to see some weak stops and the offers thinning out on a move to the 1.3300 levels and then light resistance to the move higher until deep into that big figure with the 1.3400 areas likely to be key to a further move. Downside bids light through to the 1.3050 areas with stops likely on a break through the level and the 1.3000 then seeing congestion through to the 1.2950-00 levels.
• JPY: USDJPY opened with a steady rise which increased into the Tokyo session to push through to test the 100.50 areas before running out of steam, limited news, downside bids seem to be made up with real money and importer bids and for the moment any selling through the level is likely to be met by strong bids through to the 99.50-00 areas, a push through this level though could see stops appearing from squeezed margin accounts and the market could see a quick move towards the lows of the year from June, however, until after Jackson hole the market is likely to be a little trapped with the 100.50 causing limited problems on a quiet day like today however, the chances of stronger offers through the 101.00 areas will likely slow any movement higher and the 101.50 is possibly the strongest area with the offers likely to run too the 102.00 areas before those offers weaken.
• AUD: Another quiet session for the Oz with the market reacting more to movement in the USDJPY than anything else, opening around the 0.7615 levels the market attempted to push through the 76 cent level on only one occasion and that has more or less defined the range for the day. Topside offers into the 0.7640-60 areas remain in play as the short term sellers again line up in the area with possibly stronger real money, a push through the level will likely quickly open the 77 cent levels however, offers are likely to be stronger from then on, downside bids into the 76 cent area will likely see weak stops on a break through the level and then further bids around the sentimental levels on any move lower with the 75 cent level very congested.

Overnight News

JPY/KRW:

Aso: Will Share Views on Global Eco with S. Korea Fin Minister

JPY:

Sharp Considering Return to U.S., European TV Markets: Nikkei

Japan SDF to Train for New Tasks under Revised Laws: Kyodo

JPY/KRW/CNY:

Japan, S. Korea Shouldn’t Be Tools of Other Nations: Xinhua

CNY/KRW/JPY:

China’s Wang Says Opposes Acts That Stir Korea Peninsula Tension

NZD:

New Zealand July Exports Fall to Six-Month Low on Meat

New Zealand July Imports Boosted by Aircraft Purchase

AUD:

Australia’s Morrison: Arguably Fewer Moving Parts in New Senate

Today’s data

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

06:00     EUR        German GDP Q/Q Q2 (F) C 0.30% | P 0.40%

08:30     GBP       BBA Mortgage Approvals Jul C 38.5K | P 40.1K

13:00     USD       House Price Index M/M Jun C 0.30% | P 0.20%

14:00     USD       Existing Home Sales Jul C 5.55M | P 5.57M

14:30     USD       Crude Oil Inventories P -2.5M

 

Harry Hindsight              

• EUR: Opening around the 1.1320 levels the market moved into the Tokyo session little changed and moved steadily to above the 1.1330 levels, the move into the London session saw another 10 pip gain and then a quick rise as early numbers from France hit the market with the market testing briefly above the 1.1350 levels but failing to clear the offers, the following numbers failed to impress with both German and Eurozone PMI numbers on the whole slightly worse than expected and sending the Euro back to the opening levels, the move into the NYK session saw limited buying quickly turning as the USD saw limited strength reappearing and the market slipped back to the 1.1310 levels for the run to the close on a very quiet session.
• GBP: Cable started the day very quietly before moving into the London session ranging in a quiet 20 pip range from the 1.3130 levels and unable to push through the 1.3150 levels until the move into the London session, with early results in the Eurozone area weighing on the Euro the EURGBP cross saw the GBP gaining overall and the market pushed through the 1.3150 levels and then continuing higher to test through the 1.3200 levels with weak stops triggered along the way to test to the 1.3210 levels, once the move had been made the market settled into a narrow 1.3180-13200 range through to the close initially basing off the 1.3180 levels deep into the NYK session before holding around the 1.3200 levels to the close. With the underlying better exports helping the GBP higher through the session and underpinning the market.
• JPY: A choppy narrow range through the session with the market opening around the 100.30 level and testing towards the 100.40 levels in early trading, before dropping back quickly with a slightly better than expected PMI number as the JPY strengthened, the market held the 100 through the Tokyo session however, it was contained in the early range and moved into the London session resting near its lows again, the London session saw a slow grind lower pushing steadily through the 100 levels with plenty of two way trading going through and although the market did break through the level the buyers continued to move in and the market pushed offt eh 99.95 levels and pushed back to the 100.20 areas before moving into the NYK session, NYK attempted the same move however, the bids seemed firmer into the figure area this time and the market moved off the level through the NYK session to push towards the 100.30 opening areas with light selling as the London session came to an end and holding the 100.25 areas to the close.
• AUD: With the USDJPY dipping in the early part of the session the Oz saw limited movement to the upside opening around the 0.7640 levels the market tested through the day to the 0.7655 levels deep into the NYK session having slowly moved higher through the course of the London session, however, as the London session finished so did the Oz buying and the market slipped back to the opening levels and triggered weak stops as it broke through the levels to quickly test to the 0.7615 levels and held the area to the close in a quiet session for the pair.

Yesterday’s premiership results

JPY         PMI Manufacturing Aug (P) A 49.6 | C 49.5 | P 49.3

CHF        Trade Balance (CHF) Jul A 2.93B | C 3.79B | P 3.55B | R 3.51B

EUR        France Manufacturing PMI Aug (P) A 48.5 | C 49.1 | P 48.6

EUR        France Services PMI Aug (P) A 52 | C 50.6 | P 50.5

EUR        Germany Manufacturing PMI Aug (P) A 53.6 | C 53.7 | P 53.8

EUR        Germany Services PMI Aug (P) A 53.3 | C 54.3 | P 54.4

EUR        Eurozone Manufacturing PMI Aug (P) A 51.8 | C 52.1 | P 52

EUR        Eurozone Services PMI Aug (P) A 53.1 | C 53 | P 52.9

GBP       CBI Trends Total Orders Aug A -5 | C -9 | P -4

CNY        Conference Board Leading Index Jul A 0.70% | P 0.50%

EUR        Eurozone Consumer Confidence Aug (A) A -8.5 | C -8 | P -8

USD       New Home Sales Jul A 654K | C 579K | P 592K | R 852K

Good Luck,

Andy

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