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Daily FX Market Commentary

Good morning,

 

LMAX Close

USDJPY 112.497 | EURUSD 1.18593 | AUDUSD 0.77882 | NZDUSD 0.70738 | USDCAD 1.24586 | USDCHF 0.97341 | GBPUSD 1.32239 |

 

LMAX Highs and Lows 5am GMT

                                High | Low

EURUSD               1.18789 | 1.18585

USDJPY                 112.506 | 112.319

GBPUSD               1.32657 | 1.32235

USDCHF               0.97360 | 0.97181

AUDUSD              0.78240 | 0.77905

USDCAD               1.24608 | 1.24401

NZDUSD               0.71193 | 0.70885

EURCHF                1.15491 | 1.15395

EURGBP               0.89710 | 0.89491

EURJPY                 133.488 | 133.24

 

For today

  • EUR: A slow rise up to the 1.1880 areas saw the market topping around the level and holding through to the grey hours just short of that level for the move into the grey hour, offers to the topside above current levels and through into the 1.1900 areas, with congestion likely to continue through the level with a mixture of stops the closer the market gets to the 1.1950 levels the stronger the congestion gets with the market particularly into the 1.2000 level with increased offers around and through that level. Downside bids light back through the 1.1850 areas with only slightly stronger bids on the move towards the 1.1800 areas with weak stops on a move through the 1.1780 areas and weakness again through to the 1.1700 areas with minor bids along the way.
  • GBP: Opening around the 1.3220 areas with the market rising as soon as the Cable moved into the Tokyo session pushing towards the 1.3250 area with weak stops triggered for a quick spike above the 1.3260 level before holding for the most part above the 1.3250 areas. Topside offers above yesterday’s highs with weak offers into the 1.3280-1.3300 areas possible stronger stops likely on a move through the level and the market then likely weak through to the 1.3400 areas where stronger offers are likely to appear. Downside bids light into the 1.3200 areas with the market likely to see weak stops on a move through the 1.3180 areas, a move through that level leaves the market open to the 1.3100 areas and the better bids through to the 1.3050 level.
  • JPY: The USDJPY opened a little lower around the 112.45 areas and quickly filled the gaps to the 112.50 areas with the market testing just through that area before moving into the Tokyo session and the USD dipping a little and the USDJPY falling back to trade around the 112.35 level in quiet trading. With bank holidays the USDJPY has been mired in a reasonable tight range for the most part with offers to the Topside limiting movement in that direction, topside offers through the 112.80-113.00 levels with the reasonably strong offers in that area with stronger offers likely through the 113.25 areas and into the 113.50 levels a break here will see stops appearing and the market likely to open to the 114.00 areas and potential attempts to test the double top formation from May and July with stronger stops again likely through the 114.50 areas. Downside bids congested into the 113.00 areas are likely to be light with stronger bids moving into the market as the market dips lower through the 112 handle with better bids through the 112.00-111.80 areas.
  • AUD: Opening around the 0.7790 levels the market moved quietly through into the Tokyo session testing the 78 cent level and the release of better inflation expectations and a lower home loan even if above expectations saw the market rise through to the 0.7810 levels before pausing for a short period, the market renewed its rise after a few hours and pushed gradually to the 0.7820 levels where the market holds into the grey hours. Topside offers into the 0.7840-60 areas are likely to be limited but those congestive offers are likely to continue through to the stronger 0.7880-0.7900 levels weak stops on a move through the 0.7920 levels with stronger offers likely to appear just beyond the level and likely to be congestive through to the 80 cent levels. Downside bids light into the 78 cent level and the market open to the 0.7775 levels, while there are likely to be bids its limited and the market has the potential to dip down into the 0.7740-60 areas with increasing bids appear.

 

Overnight News                                                                  

USD:

Inflation doubt limit USD

Trump says Nafta talks tough failure possible

Trump vows tax plan to boost economy: poll cites views on wealthy

Fed divide on inflation intensified at Sep policy meeting

Fed should raise policy rate to 2.5% over two years – Williams

EUR:

EU revises plan on banking safety net to win over Germany

NAFTA:

Business leaders say no Nafta better than no deal

JPY:

Japan PM’s ruling bloc seen nearing 2/3 majority on Oct 22 lower house poll – Nikkei

SGD:

MAS see edging toward tightening policy

 

Today’s data

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

GBP       RICS House price balance Sep A 6.00% | C 4.00% | P 6.00%

JPY       Domestic CGPI Y/Y Sep A 3.00% | C 3.00% | P 2.90%

AUD       Consumer inflation expectation Oct A 4.30% | P 3.80%

AUD       Home Loans Aug A 1.00% | C 0.50% | P 2.90% | R 2.80%

JPY       Tertiary industry Index M/M Aug A -0.20% | C 0.10% | P 0.10%

09:00     EUR       Eurozone Industrial Production M/M Aug C 0.60% | P 0.10%

12:30     CAD       New Housing Price Index M/M Aug C 0.30% | P 0.40%

12:30    USD       PPI M/M Sep C 0.40% | P 0.20%

12:30    USD       PPI Y/Y Sep C 2.60% | 2.40%

12:30    USD       PPI Core M/M Sep C 0.20% | 0.10%

12:30    USD       PPI Core Y/Y Sep C 2.00% | 2.00%

12:30    USD         Initial Jobless Claims (OCT 07) C 253K | P 260K

14:30    USD       Natural Gas Storage P 42B

15:00    USD       Crude Inventories P -6.0M

 

Harry Hindsight

  • EUR: Euro’s opened around the 1.1810 level rising into the Tokyo session testing towards the 1.1830 level before slipping back once the Tokyo fix was over with, the market tested through the 1.1800 areas and was unable to break any further and started a steady climb from there moving into the grey hour pushing the opening levels again, early London took the market to the 1.1840 levels and Spain/Catalonia comments again with the market resetting again and slowly rallying from the 1.1800 levels again to push through the 1.1850 levels into the NYK session and holding for a long period around the 1.1850 areas unable to push through the 1.1860 areas until towards the close pushing lightly through and holding round the 1.1870.
  • GBP: Cable tested to the 1.3220’s in early Tokyo and then ranged around the opening 1.3200 levels for much of the day, basing around the 1.3180 levels and ranging to the 1.3210 areas, the market eventually broke to the topside towards the close of the day with limited news and data for the GBP and the market ending the day just off the highs.
  • JPY: The market slipped slowly lower through into the Tokyo session before rising quickly through to the 112.55 areas before falling back from the highs, the move through the balance of the Tokyo session saw the market slipping slowly through to the opening levels, early London were steady sellers and the market slipped back to test through the 112.10 levels into early NYK, before recovering the losses through to test that high again and range around the 112.40 before finishing just short of the highs.
  • AUD: The market based along the opening 0.7775 areas through the day with only minor dips through that level late in the session however, the market moved into the Tokyo session with strong AUDJPY buying moving through the early part of the day to test to the highs around the 0.7810 level before returning to the base area, the move through the day saw the market moving around the 0.7775-95 levels and there were no surprises.

 

Yesterday’s premiership results

AUD       Westpac Consumer Confidence Oct A 3.60% | P 2.50%

JPY         Machine Orders M/M Aug A 3.40% | C 1.00% | P 8.00%

06:00     JPY         Machine Tool Orders Y/Y Sep (P) P 36.20%

14:00     USD       JOLTS Job Openings Aug C 6.06M | P 6.17M

18:00     USD       FOMC Meeting Minutes

 

Good Luck,

Andy

 

 

 

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