Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.184 | EURUSD 1.18219 | AUDUSD 0.78926 | NZDUSD 0.73193 | USDCAD 1.26797 | USDCHF 0.96202 | GBPUSD 1.30106 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.18347 | 1.18118

USDJPY                 109.639 | 109.117

GBPUSD               1.30221 | 1.29999

AUDUSD              0.79191 | 0.78876

USDCHF               0.96557 | 0.96189

USDCAD               1.26857 | 1.26734

NZDUSD               0.73311 | 0.73058

EURGBP               0.90944 | 0.9082

EURCHF                1.14150 | 1.13726

EURJPY                 129.650 | 129.008

For today

• EUR: Light volume and tight ranges from the opening with the market opening around the close on Friday and pushing early to the 1.1828 areas before drifting into the Tokyo session, the high was tested a few times before drifting back with some slight movement around the CNY numbers to test to the 1.1817 areas before rallying back to make the highs just above the 1.1834 level and a steady drift from there into the grey hour dipping back towards the 1.1810 areas. Topside offers light into the 1.1900 areas with stronger offers likely just beyond that level and through to the 1.1920 area with likely weak stops appearing on a move through, some sentimental offers through into the 1.1940-60 areas are likely to be limited with the stronger 1.2000 level possibly seeing option barriers appearing and the market then seeing stronger stops as it moves into the late 2014 range to 1.2500. Downside bids light into the 1.1800 areas however, it’s possible that late buyers could move in with expectations of a move higher with stops light through to the 1.1700-1.1660 areas with the lower level likely to be a key level back to the 1.1400-1.1500 congested areas.
• GBP: Very quiet session with early traders looking to test the 1.3000 level before rallying back to the opening 1.3010 areas and pushing slowly through to 1.1315 into the Tokyo session, Tokyo sellers repeated the test towards the 1.3000 level and failed twice through the early part of the session before the market slowly pushed to the 1.3020 areas late in the session only to drift through to the grey hour holding near the opening. Downside bids a little congested through the 1.3000 area with weak stops likely to be absorbed through to the 1.2950 areas and better bids appearing around the 1.2900 areas, while the market is congested through the level it’s a distance to the 1.2765 area where stronger bids and stops are likely to appear on a key level opening the market to a larger drop back into the 1.2600-1.2700 areas. Topside offers are likely to see weak offers through to the 1.3100 areas before the market opens for a fresh test higher with stronger offers likely on a move through the 1.3200 areas.
• JPY: A slow climb higher through the session with the market opening just off the closing Friday levels and lifted from the lows around the 109.05 areas only once the market moved into the Tokyo session, good GDP numbers had little effect on the market and the USDJPY steadily rose as some of the US/N. Korea rhetoric was curtailed with the market extending the highs slowly into the grey hour to test just above the 109.60 area. Topside offers into the 109.80 areas are likely to be limited with the market becoming stronger on a push towards the 110.00 areas and the immediate barrier to any further gains, a push through the 110.20 areas will likely see weak stops and some limited break out stops appearing for a push to the congested area around the 110.50 areas and stronger offers then appearing from the 110.80 areas onwards. Downside bids into the 109.00 areas are likely to have been renewed by short term buyers and the level will likely not see many weak stops until the 108.50 areas is cleared confidently with sentimental bids into the 108.00 areas however, the market may have stronger impetus and drive through easily if yield players hold off buying for the short term.
• AUD: A quiet first couple of hours into the Tokyo session saw the market unchanged from the opening and drifting only to the 0.7890 areas before starting a rise to test towards the 0.7920 areas however, although the market kept in touch with the level for a couple of hours it was unable to push through and slowly drifted back through to the lows again into the grey hour. Topside offers into the 80 cent level and likely to see weak stops appearing on a strong move through with very little likely to appear between weak stops and that figure area, a push through will likely see a similar result and the market stalling just above the level and the medium term profit taking moving in. Downside bids likely into the 0.7840 areas and some weak stops on a run to the 78 cent area, sentimental bids light through the 78 cent level however, congestion around the 0.7770 area is likely to slow the market with some stops in the mix for a move back to the 75-77 cent range.

Overnight News

EUR:

Merkel rival slams car bosses in bid to revive campaign

AUD:

Australian deputy PM says he may not be eligible for parliament

JPY:

Japan Q2 GDP rises annualised 4.0% on consumption, Capex

GBP:

UK employers see measly pay growth ahead, companies turn gloomy

Britain says Brexit talks should move to next phase as ministers show unity

CNY:

China’s Xi grapples with rising cost of supporting Kim Jong Un

USD:

CIA chief says nothing imminent in US/N. Korea standoff

White House defends Trump’s response to Virginia violence

Today’s data

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

NZD       Retail Sales Q/Q Q2 A 2.00% | C 0.70% | P 1.50% | R 1.60%

NZD       Retail Sales Q/Q Q2 A 2.10% | C 0.70% | R 1.20% | R 1.50%

JPY         GDP Q/Q Q2 (P) A 1.00% | C 0.60% | P 0.30%

JPY         GDP Deflator Y/Y Q2 (P) A -0.40% | C -0.50% | P -0.80%

CNY        Retail Sales Y/Y Jul A 10.40% | C 10.80% | P 11.00%

CNY        Fixed Assets Ex Rural YTD Y/Y Jul A 8.30% | C 8.60% | P 8.60%

CNY        Industrial Production Y/Y Jul A 6.40% | C 7.10% | P 7.60%

09:00     EUR        Eurozone Industrial Production M/M Jun C -0.50% | P 1.30%

Yesterday’s premiership results

NZD       Business NZ Manufacturing Index Jul A 55.4 | P 56.2 | R 56

EUR        German CPI M/M Jul (F) A 0.40% | C 0.40% | P 0.40%

EUR        German CPI Y/Y Jul (F) A 1.70% | C 1.70% | P 1.70%

USD       CPI M/M Jul A 0.10% | C 0.20% | P 0.00%

USD       CPI Y/Y Jul A 1.70% | C 1.80% | P 1.60%

USD       CPI Core M/M Jul A 0.10% | C 0.20% | P 0.10%

USD       CPI Core Y/Y Jul A 1.70% | C 1.70% | P 1.70%

Stay lucky

Andy

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