Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.129 | EURUSD 1.16647 | AUDUSD 0.79148 | NZDUSD 0.74552 | USDCAD 1.25405 | USDCHF 0.94556 | GBPUSD 1.29958 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.16820 | 1.16633

USDJPY                 111.172 | 110.767

GBPUSD               1.30227 | 1.29954

AUDUSD              0.79280 | 0.79037

USDCHF               0.94647 | 0.9447

USDCAD               1.25502 | 1.25341

NZDUSD               0.74563 | 0.74266

EURGBP               0.89842 | 0.89645

EURCHF                1.10433 | 1.10313

EURJPY                 129.763 | 129.313

For today

• EUR: A very quiet session saw the Euro rise from the opening 1.1660 areas to test through the 1.1680 levels before drifting off again as the market moved into the Tokyo session, the market then held around the 1.1670 levels through several hours into the grey hour, Topside offers strong into the 1.1680 levels and through to the 1.1700 area however, they could be just option barriers and the market on a push through will likely see strong stops appearing and the market quickly moving higher with only sentimental levels through to the stronger 1.1800 area and a possible repeat. Downside bids light through the 1.1600 areas with the market likely to see weak stops on a move through the level, some weak bids likely through the 1.1550 area before stronger bids on a move into the 1.1500 and likely to continue to the 1.1480 levels, weak stops through the level and limited congestions through the 1.1450 areas with 1.1400 likely to be key.
• GBP: Opening unchanged from Friday saw the market quiet for the first couple of hours before moving into the Tokyo session rising quietly from the 1.2995 level to test towards the 1.3020 level before moving into the grey hour, Topside sees strong offers beyond the 1.3050 level and continuing through to 1.3100 with those offers likely to be particularly thick, a push through towards the 1.3130 areas will likely see weak stops and break out stops appearing for a move higher towards the 1.3200 levels. Downside bids light through to the 1.2900 areas with plenty of congestion around that level however, the market is likely to see better bids on a dip through the 1.2850 areas continuing into the 1.2800 level before weak stops appear below the 1.2765 areas.
• JPY: USDJPY moved quietly into the Tokyo session dropping quickly back to the 110.80 areas from the 111.15 opening level before slowly rising back to the 111.00 area for the move into the grey hour, Downside bids into the 110.80 areas and while there is likely to be some weak stops the market will likely see these absorbed into the 110.50 areas before stronger stops appear, a test back to the 110.00 is likely to happen quickly with limited congestion on a move through the level, Topside offers into the 111.50 areas will likely see some stops through the level and the market moving into light congestion around the 112.00 areas with weak stops likely to appear on a break through the level however, 112.50 is likely to pose a little more resistance to any move.
• AUD: A little bit of a weak opening with the market pushing back to fill the gap on the charts which was only a matter of 5 pips or so, there was a brief spike to the 0.7930 levels before dipping back to 0.7910 area and moving into the Tokyo session slowly pushing back towards the high, the low was made on the next move testing back to just below the opening before returning to hold around the 0.7920 areas on limited volume and data. Topside offers through the 0.7970 level and increasing in size as the market attempts to push to the 80 cent level, with possibly very strong option barriers in front and then strong stops appearing on a break through the 0.8020 areas a possibility, Downside bids light through to the 0.7880 levels with some support in the area, likely weak stops on a move through the level will meet token bids into the 0.7860-40 level with a move through seeing light bids into the 78 cent are3as and possible stronger stops on a move through 0.7780 area.

Overnight News

USD:

Trump Jr. adds Washington lawyer to legal team

JPY:

PM Abe denies favours for friend amid falling support

EUR/GBP:

Euro clearing could stay in UK, says Irish Central Bank Chief Philip Lane

German free market forces warn against EU militancy on Brexit

IMF:

IMF keeps global growth forecasts: China, Eurozone revised higher

Today’s data

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

JPY         Manufacturing PMI Jul (P) A 52.2 | C 52.3 | P 52.4

07:00     EUR        France Manufacturing PMI Jul (P) C 54.6 | P 54.8

07:00     EUR        France Services PMI Jul (P) C 56.7 | P 56.9

07:30     EUR        Germany Manufacturing PMI Jul (P) C 59.2 | P 59.6

07:30     EUR        Germany Services PMI Jul (P) C 54.3 | P 54

08:00     EUR        Eurozone Manufacturing PMI Jul (P) C 57.2 | P 57.4

08:00     EUR        Eurozone Services PMI Jul (P) C 55.4 | P 55.4

12:30     CAD       Wholesale Sales M/M May C 0.50% | P 1.00%

13:00     CNY        Conference Board Leading Index Jun

13:45     USD       Manufacturing PMI Jul (P) C 52.2 | P 52

13:45     USD       Services PMI Jul (P) C 54 | P 54.2

14:00     USD       Existing Home Sales Jun C 5.59M | P 5.62M

Weekend News

EUR:

French President Macron’s popularity rating drops

EU antitrust regulators say probing possible German car cartel

USD:

Trump open to signing Russia sanctions legislation official

New Trump communications director Anthony Scaramucci promises crackdown on media leaks

US lawmakers reach deal on Russia sanctions bill, creating limits for Trump

TRY:

Erdogan visits gulf in bid to defuse Qatar row

GBP:

Britain needs transitional deal with EU, to end before next election Trade Minister Fox

May to stay as PM until at least 2020, close ally predicts

EUR/RUB:

Macron to discuss Ukraine with Putin, Merkel and Poroshenko

EUR/USD:

EU sounds alarm, urges US to coordinate Russia sanctions

CNY:

China’s Xi is said to approve overseas investment crackdown WSJ

Harry Hindsight

• EUR: Opening around the 1.1630 levels with very little movement through the Asian session dipping to the 1.1620 level and only as it moved into the grey hour with the market pushing off the opening levels to test through to the 1.1680 areas, the market dipped into the London opening and then held through to NYK in a tight range around the 1.1640-50 area, NYK took the market back through the 1.1660 areas and tested lightly through the 1.1680 before drifting off to close around the 1.1660 areas.
• GBP: From the opening the Cable dropped back from the 1.2975 levels to test the 1.2955 area into the Tokyo session as EURGBP buyers attempted a move back to the 0.88 level, the move failed and the market drifted back allowing the Cable to move back towards the opening level, with UK’s Hammond reportedly told Goldman Sachs that he wanted a long Brexit transition, this saw the Cable rising into the London session and pushing to the 1.3000 level, struggling with the level initially before pushing through to the 1.3020 area, the market failed the level and started a series of steps lower retracing back through the opening level and once London closed the market restarted the move to the 1.3000 areas.
• JPY: The ramifications of the Trump/Russia story continue to hamper the USD the market continues to drift for the USDJPY, the move through the Asian session saw very little movement with the market testing above the 112.00 areas on a couple of occasions before starting a steady drift through the balance of the day on the move into the London session, trading to the 111.50 levels into the NYK opening and then testing the 111.00 towards the end of the session.
• AUD: With very little in the market during the early part of the session with the market opening around the 0.7960 highs and drifting through to the 0.7920 levels before the comments started to appear from RBA Deputy Gov. Debelle, the comments saw the market drop quickly through the 79 cent area and testing to the 0.7880 area and holding through into the grey hour, early London pushed the market back through to the 79 cent level but continued to struggle to gain any real movement and only managed to push into the NYK session trading around the 0.7930 areas before drifting to the close around the 0.7915 areas in a lacklustre end to the day.

Yesterday’s premiership results

GBP       Public Sector Net Borrowing (GBP) Jun A 6.3B | C 4.3B | P 6.0B | R 6.4B

CAD       CPI M/M Jun A -0.10% | C 0.00% | P 0.10%

CAD       CPI Y/Y Jun A 1.00% | C 1.10% | P 1.30%

CAD       CPI Core – Common Y/Y Jun A 1.40% | P 1.30%

CAD       CPI Core – Trim Y/Y Jun A 1.20% | P 1.20%

CAD       CPI Core – Median Y/Y Jun A 1.60% | P 1.50%

CAD       Retail Sales M/M May A 0.60% | C 0.40% | P 0.80% | R 0.70%

CAD       Retail Sales Less Autos M/M May A -0.10% | C 0.40% | P 1.50% | R 1.30%

Stay lucky

Andy

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