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Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 111.886 | EURUSD 1.16469 | AUDUSD 0.79368 | NZDUSD 0.74182 | USDCAD 1.25075 | USDCHF 0.95246 | GBPUSD 1.3025 |

 

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.16538 | 1.16379

USDJPY                 112.089 | 111.816

GBPUSD               1.30320 | 1.30157

USDCHF               0.95318 | 0.95209

AUDUSD              0.79408 | 0.78921

USDCAD               1.25178 | 1.2505

NZDUSD               0.74360 | 0.74154

EURCHF                1.10973 | 1.1090

EURGBP               0.89448 | 0.89339

EURJPY                 130.446 | 130.24

 

For today

  • EUR: A quiet session for the most part for the Euro with the market holding around the 1.1640-50 level, with the market testing through the 1.1640 for a period in Tokyo before the market recovered to test the other way with the same result and moving into the grey hour around the opening level. Nothing really changes with 1.1700 Topside offers remaining with stops likely on a move through the 1.1720-25 areas opening the market to a larger move, obviously today is FOMC with the market expecting no change however, dependent on the commentary will decide any direction, topside offers through the 1.1740-60 areas with stronger levels into the 1.1800 areas, Downside bids likely to be light in comparison with limited bids into the 1.1600 areas and weak stops and limited bids on a move through to the stronger 1.1500-1.1480 area, with possible strong stops.
  • GBP: As with the Euro the market in Cable traded quietly between the 1.3020-30 levels for the most part with the market testing lightly above the topside and the downside however, so far Cable is slightly off the opening level, Topside offers into the 1.3100 areas with some weak stops through the level however, the closer the market moved to the 1.3150 areas the stronger the resistance to the move will be, stops on a strong move through will see limited protection into the 1.3200 areas and the market moving into mid-range from Oct. Downside bids light through the 1.3000 areas with light stops and the market likely to test to the 1.2950 areas with limited support, slightly stronger into the 1.2900 areas however, once the market moves through the level the market strengthens with congestion into the 1.2850 areas
  • JPY: USDJPY moved into the Tokyo session testing through the 112.00 levels to the 112.10 areas however, having moved towards the topside the market struggled and drifted slowly lower to the opening around the 111.90 areas. Topside offers through the current levels with some congestion continuing through the 112.50 areas and possible weak stops on a move through, stronger offers into the 113.00 areas and then congestive offers all the way through to the 113.50 areas before the market opens for a test higher towards mid months highs, Downside bids light through the downside into the 110.50 areas having only in the past 48hrs moved off those lows, a test of this level with open the market to stronger stops and the market targeting the 109.50 areas with stronger trend lines around that level to support.
  • AUD: The Oz drifted through the early part of the session with the market holding around the 0.7935 levels, a minor dip before the numbers saw the market trade to the 0.7920 areas before the release of inflationary numbers, the data saw some weakness in inflation and what thought of interest rate rises with expectations less certain for the Oz, the market reacted by dropping through the 79 cent level testing towards the 0.7890 area before bouncing back through the 79 cent areas and then drifting between the two into the grey hour. Downside bids into the 0.7880 areas with weak stops on a move through will likely see the 0.7840 levels tested quickly with some support in the area it may limit the downside however, that is dependent on the FOMC later in the day with congestion through to the 0.7800 areas and likely to continue through to the 0.7775 level before weakness appears.

 

Overnight News                                                                  

USD:

Trump tells WSJ Yellen, Cohn both in running to be Fed Chair

Senate Republican plan to repeal, replace Obamacare fails to get enough votes

AUD:

Lowe: Steady unemployment has allowed us to be patient

Lowe: Australia wage growth should pick up as job market improves

Lowe: We don’t need to move in lockstep with global peers

Global tightening has no automatic implications for RBA

EUR:

Nowotny sees no need to set timetable to end bond buying

IMF/EUR

IMF urges ECB to maintain stimulus amid downside risks to growth

NZD:

RNBZ’s McDermott: Neutral interest rate estimated to be 3.5%

McDermott: Estimates core inflation at 1.4%

McDermott: Neutral interest rate has been falling

McDermott: says inflation pressures relatively moderate

NZ 2Q exports increase most since 2010 on Dairy

JPY:

Japanese firms avoiding price hikes now but sentiment is changing BoJ’s Nakaso

 

Today’s data

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

NZD       Trade Balance (NZD) Jun A 242M | C 100M | P 103M | R 130M

JPY         Corporate Service Price Y/Y Jun A 0.80% | C 0.80% | P 0.70%

AUD       CPI Q/Q Q2 A 0.20% | C 0.40% | P 0.50%

AUD       CPI Y/Y Q2 A 1.90% | C 2.20% | P 2.10%

AUD       CPI RBA Trimmed Mean Q/Q Q2 A 0.50% | C 0.50% | P 0.50%

AUD       CPI RBA Trimmed Mean Y/Y Q2 A 1.80% | C 1.80% | P 1.90%

AUD       CPI RBA Weighted Median Q/Q Q2 A 0.50% | C 0.50% | P 0.40%

AUD       CPI RBA Weighted Median Y/Y Q2 A 1.80% | C 1.70% | P 1.70%

06:00     CHF        UBS Consumption Indicator Jun P 1.39

08:30     GBP       BBA Mortgage Approvals Jun C 39.9K | P 40.3K

08:30     GBP       GDP Q/Q Q2 (A) C 0.30% | P 0.20%

08:30     GBP       Index of Services 3M/3M May C 0.40% | P 0.20%

14:00     USD       New Home Sales Jun C 615K | P 610K

14:30     USD       Crude Oil Inventories P -4.7M

18:00     USD       FOMC Rate Decision C 1.25% | P 1.25%

 

Harry Hindsight

  • EUR: Quiet trading through the early part of the Asian session saw the lows made as the market dipped into the Tokyo fix to test into the 1.1630 level before the market regained the opening and pushing slowly through to the 1.1660 areas, the move into the London session saw the market dipping back to run along the 1.1650 areas through to the NYK session with early buyers buying on the back of the IFO numbers this time the market moved quickly through the 1.1660 level sas the market test quickly to the 1.1700 area and strong two trading, after an hour of trading around the 1.1690 level the market spiked to the 1.1710 levels but dropped back as the buyers failed and the market quickly dropped back below the 1.1690 eventually seeing strong selling, one could suspect that the buyers through the 1.1700 levels were pushing for the options however, given the drop back whether successful or not the buyers lost as the market hit the 1.1650 levels again and traded quietly just below the level to the close.
  • GBP: Early narrow range through into the London session saw the Asian session initially dipping to the 1.3015 level before struggling into London testing the 1.3035 level, through London the market was a little choppy but contained in a 1.3010-40 range until the move into NYK with the market already pushing off the low and triggering weak stops on a push through the 1.3050 levels to quickly top around the 1.3085 areas, the market then drifted lower from the highs before settling back into the opening areas through to the close.
  • JPY: Pushing the market a little higher through to the 111.30 areas form the opening around the 111.10 level, trading through to early morning in Tokyo the market started to drift and the market tested through to the grey hours pushing to the 111.00 areas, early London sold through the figure before the market started a strong and steady rise through the day pushing into the NYK session around the 111.50 level and eventually testing late into the session through to the 111.90 level and running out of time for a test of the 112.00 level.
  • AUD: The Oz drifted from the opening aro0und the 0.7925 level testing into the mid Tokyo session towards the 79 cent level before reversing quickly higher through to the 0.7940 with little news in the market the move into the London session for a change see the day traders side-lined for the moment and drifting back to the 0.7925, the move towards the NYK session saw the market moving steadily higher pushing through the early highs and through the 0.7950 areas to again test towards the 0.7970 level, after a couple of hours testing the level the market drifted off and back through the 0.7950 areas to hold around the 0.7935 level.

 

Yesterday’s premiership results

JPY         BoJ Minutes June Meeting

EUR        German Import Price Index M/M Jun A -1.10% | C -0.70% | P -1.00%

EUR        German IFO – Business Climate Jul A 116 | C 114.9 | P 115.1

EUR        German IFO – Expectations Jul A 107.3 | C 106.5 | P 106.8

EUR        German IFO – Current Assessment Jul A 125.4 | C 123.8 | P 124.1

GBP       CBI Trends Total Orders Jul A 10 | C 12 | P 16

USD       House Price Index M/M May A 0.40% | C 0.50% | P 0.70% | R 0.60%

USD       S&P/Case-Shiller Composite-20 Y/Y May A 5.70% | C 5.80% | P 5.67% | R 5.80%

USD       Consumer Confidence Jul A 121.1 | C 116 | P 118.9 | R 117.3

 

Good Luck,

Andy

 

P.S. I will be away until the 13th August tempting trout in Eire, or not as the case maybe, or just some Guinness will do

 

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