Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.211 | EURUSD 1.17598 | AUDUSD 0.79272 | NZDUSD 0.73125 | USDCAD 1.25847 | USDCHF 0.96495 | GBPUSD 1.2873 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.17628 | 1.71485

USDJPY                 109.426 | 109.18

GBPUSD               1.28820 | 1.28647

AUDUSD              0.79349 | 0.79196

USDCHF               0.96605 | 0.96467

USDCAD               1.25958 | 1.25732

NZDUSD               0.73234 | 0.73047

EURGBP               0.91370 | 0.91248

EURCHF                1.13548 | 1.13389

EURJPY                 128.597 | 128.332

For today

• EUR: A very quiet session with no strong news weighing on the market and limited numbers for the day, opening around the 1.1760 levels the market initially traded to the 1.1750 areas and held for the bulk of the session before rising through the 1.1760 areas after the JPY numbers were released and then drifting back to move into the grey hour again on its lows, Topside offers into the 1.1780 levels are likely to be reasonably weak but steady through to the 1.1820 areas before weak stops appear theses however, are likely to be small as stronger offers start to appear from the 1.1850 level onwards with the resistance getting stronger the closer you get to the 1.1880 areas and the highs of the beginning of the Month, downside bids light through to the 1.1700 areas with bids likely to appear just in front of that level and possible increasing into the 1.1660 areas with some limited congestion appearing in the area, a push through the level could see some weak stops appearing and the market open to the 1.1620 level before light bids reappear however, with impetus the market could see a quick break lower with limited bids until the low 1.1500 areas.
• GBP: Opening a little lower the market steadily moved from the 1.2860 level to push back to the 1.2880 area into the Tokyo session before ranging around the 1.2870-80 areas into the grey hour on quiet trading. Topside offers light through to the 1.2920 areas with the market then seeing very little to slow it until limited congestion from the 1.2950 areas building into stronger resistance around the 1.3000 areas, a push through the 1.3030-40 areas could see some weak stops however, one suspect that the stronger stops will likely be beyond this level and the market possibly pushing quickly for the 1.3100 areas that is if there wasn’t the poor right move number already in the market, Downside bids into the 1.2850 areas is likely to be the strongest point with some light bids into the 1.2800 areas and light congestion through the level until 1.2765 areas with some support likely to appear there, little data for the day and the market possibly becalmed.
• JPY: USDJPY opened a touch higher and then traded through the early part of the session unable to pass firmly through the 109.40 areas and drifting around the 109.30 areas until later in the session when it dipped to the 109.20 level and held for several hours around the lows into the grey hour. Topside offers light through the 109.60 level with some stronger offerings into the 110.00 level however, having pushed backwards and forwards through the level it is likely to be limited and really nothing resistance wise of strength until the market moves above the 110.50 areas and starts to close towards the 110.80-111.00 areas where strong offers are likely to be found a break above the 111.20 area is likely to see weak stops appearing and the market opening a little to the 111.50 levels and some congestive offers, Downside bids limited on a move back to the 109.00 areas with stronger bids on a push below the 108.80 areas and then building further support down into the 108.50 areas, a push through the level could see weak stops appearing and possibly some short term plays however, 108.20 is likely to be strong enough to turn the market for the time being.
• AUD: A very quiet day for the Oz with the market opening around the 0.7930 levels and then ranging through the session in a 0.7920-35 area, Downside bids likely to be weak until the 0.7880 congestive areas with better bids once the market moves into the 0.7840-60 level, light stops through the level will likely see a quick test of the 78 cent level, with limited bids in the area until 0.7775 where there could possibly be light bids however, the market impetus at that point would suggest a deeper move if it breaks and support is likely to be sharpest into the 0.7740-60 areas. Topside offers into the 0.7960 level then see more congestion on any move for the 80 cent level, with limited potential for stops on a move through and the market likely to see stronger offers appearing on a move through the 80 cent.

Overnight News

AUD:

Australian citizenship crisis erodes support for government

EUR:

German July tax revenue rises 9.2% YoY Finance Ministry says

French unions fret as Macron readies promised labour law upheaval

KRW:

1. Korea wans of merciless nuclear strike due to US exercises

Today’s data

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

GBP       Rightmove House Prices M/M Aug A -0.90% | P 0.10%

JPY         All Industry Activity Index M/M Jun A 0.40%| C 0.40% | P -0.80%

12:30     CAD       Wholesale Sales M/M Jun C -0.20% | P 0.90%

Weekend News

USD:

US officially launch investigation of China’s intellectual property practices

Steve Bannon out: Trump decides to fire Chief strategist

CNY:

China directive reining in outbound deals marks end of an era

NZD:

Buoyant NZ Labour party eyes political redemption under Ardern

NAFTA:

Mexico to host second round of Nafta negotiations Sep 1-5

Negotiations will continue at rapid pace moving to Canada in late Sep

Returning to US in October

Additional round planned for later this year

Committed to ambitious outcome a great deal of effort and negotiation required in coming months

USD/KRW:

Military exercises to begin as US and S. Korea brace for north’s fury

HKD:

Mass street protests in Hong Kong after democracy activists jailed

JPY:

Kuroda says BoJ can avoid bad normalization impact Mainichi

EUR:

Greece’s credit rating raised by Fitch on recovering economy to B- from CCC

Harry Hindsight

• EUR: Contained in a reasonably tight range through the day the market saw some choppy periods with reactions to events in Spain however, data wise only the German numbers showed anything of note with the higher inflationary numbers again coming into focus for the Germans and pressure for the EU to start trimming back the QE, opening around the 1.1725 levels the move into the Tokyo session saw the market test to the 1.1710 areas to make the days lows before rising through Tokyo to test into the grey hour 1.1740 areas, German numbers saw the market rise again to the 1.1755 levels before dropping back on the dip in the Eurozone current account and then spike higher to make the highs around the 1.1775 level, from that point onwards the market held around the 1.1750 areas until late in the session to again test above the 1.1760 areas for the close.
• GBP: Very little news for the Cable with the opening around the 1.2870 level and rising slowly through to the grey hour to just below the 1.2900 areas, early morning saw the GBP dragged a little higher with the Euro to test towards the 1.2910 areas with some minor stops on the move exaggerating the move a little before slipping back towards the opening levels as the market moved into the NYK session, sellers appeared as the market approached the option cut off in NYK and the close in London saw the market moving off the lows just above 1.2830 to slowly move to the close around the opening levels in what appeared to be a little lacklustre over all.
• JPY: Asia traded quietly with the market opening around the 109.50 areas and slipping back into the Tokyo session to test the 109.30 areas several times and holding through to the grey hour, early London quickly sold the USD and the USDJPY fell back to the 109.00 areas to hold through to the NYK session where quick early selling saw the market triggering weak stops on a move to the 108.60 levels. Option expiry and the end of London saw the USD recovering across the board and the market testing quickly back through the 109.00 level and steadily rising through to make the opening areas in an attempt on the 109.60 level before drifting in the final hours to finish the day around the 109.20 levels.
• AUD: An early run on the Oz saw the lows of the day set at the 0.7870 areas before slowly rising back through the opening 0.7885 areas to test to the 79 cent level through to the grey hour, early London saw weak selling and the official opening saw those sellers quickly cover on the break through the 79 cent level as the market moved to the 0.7930 areas before slowing and ranging quietly into NYK, the market then extended its gains a little to push towards the 0.7940 areas as the USD suffered before Michigan confidence number came in stronger and helped the USD a little however, the move to the close saw the Oz again testing the 0.7940 areas to push through for a brief period and set the high for the day and a slow range around the 0.7935 level to the close.

Yesterday’s premiership results

EUR        German PPI M/M Jul A 0.20% | C 0.00% | P 0.00%

EUR        German PPI Y/Y Jul A 2.30% | C 2.20% | P 2.40%

EUR        Eurozone Current Account (EUR) Jun A 21.2B | C 27.3B | P 30.1B | R 30.5B

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

CAD       CPI Y/Y Jul A 1.20% | C 1.20% | P 1.00%

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

CAD       CPI Core – Trim Y/Y Jul A 1.30% | P 1.20%

CAD       CPI Core – Median Y/Y Jul A 1.70% | P 1.60%

USD       U. of Michigan Confidence Aug (P) A 97.6 | C 94 | P 93.4

Stay lucky

Andy

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