Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.529 | EURUSD 119.33 | AUDUSD 0.76147 | NZDUSD 0.68792 | USDCAD 1.27144 | USDCHF 0.97926 | GBPUSD 1.3339 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.19361 | 1.19119

USDJPY                 111.694 | 111.321

GBPUSD               1.33323 | 1.33137

AUDUSD              0.76188 | 0.75931

USDCHF               0.98107 | 0.97896

USDCAD               1.27231 | 1.27012

NZDUSD               0.68817 | 0.68537

EURGBP               0.89573 | 0.89434

EURCHF                1.16978 | 1.16819

EURJPY                 133.230 | 132.717

For today

• EUR: Opening around the closing levels the Euro traded quietly through the early part of the session with the market moving into the Tokyo session dipping down to the 1.1910 levels before slowly attempting to recover and holding around the 1.1925 areas to the grey hours, Topside offers into the 1.1850 levels and congestion likely through the level with possibly stronger offers into the 1.2000 areas with weak stops likely on a move through the 1.2020 area with only limited offers around the 1.2050 level. Downside bids light through the 1.1900 areas with weak stops on a move through the 1.1880 level with some bids into the 1.1850 areas however, those bids are still building so likely to be weak at the moment and leaving the downside vulnerable through to the 1.1800 areas where possible stronger bids appear and larger stops on a move through.
• GBP: Opening unchanged the market dropped to the 1.3325 areas and slowly drifted through the session testing down to the 1.3315 level and holding around that level through to the grey hours, Topside offers remain into the 1.3350 level with weakness then through to the 1.3400 level where stronger stops are likely to appear with weak stops limited until the market pushes through the 1.3440 areas with congestion likely to appear into the 1.3460-00 areas with strong offers into 1.3500 levels. Downside bids light through the 1.3300 level for the moment with the market needing to consolidate above the level, however a push at the level would likely see the market opening quickly to the congested 1.3250-00 areas with the bids likely to increase on the move through to the 1.3200 levels.
• JPY: The pre market period saw wide pricing and the opening saw the market broadly in line with the choppy close on Friday, with the market dipping below the 111.50 level and then quickly pushing higher into the Tokyo session pushing through to the 111.70 level before slipping back and eventually dropping back through the 111.50 level triggering some stops along the way to hold along the 111.35 areas to the grey hours. Topside offers light through the 112.00 areas with weak stops just beyond the level and open to the 112.50 areas were congestive offers start to appear on a run towards the stronger 113.00 area. Downside bids light through to the 111.20 level and some stronger bids likely to the 111.00 however, a push through the level could see some stops appearing and 110.50 becoming vulnerable however, this is likely to be the strongest point on the charts for the short term with the market moving up from these levels to break out of the 107-110 range form a couple of months ago.
• AUD: Dropping from the 0.7618 opening areas the market saw further AUDJPY selling moving into the market in the Tokyo session testing the downside through the 0.7595 level before finding some support to help the market back above the 76 cent level for a long run into the grey hours, offers to the topside into the 0.7650 areas with congestion then increasing through the level to the 77 cent4 areas, a push through the 0.7710 areas could see some weak stops however, the 0.7740 area is likely to protect further stops and the market then struggling a little with 0.7780 likely to be a strong area. Downside bids light back through the 76 cent areas with possibly weak stops appear with minimal congestion to protect from a move back to the stronger 0.7550 areas with decent stops likely on a move through the 0.7530 areas to test the 75 cent level and possibly a deeper move long term.

Overnight News

MXN:

Mexico finance minister Meade to leave post soon EU

GBP:

City of London says tax take backs case for Brexit banks deal

USD:

Trump again backs alleged harasser, Democrat gives up key post

JPY:

Japan plans extra budget of SU$24-26b for fiscal 2017 sources

CNY:

China’s Oct industrial profits surge on boost from higher commodities

Today’s data

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

JPY         Corporate Service Price Y/Y Oct A 0.80% | C 0.90% | P 0.90%

15:00     USD       New Home Sales Oct C 627K | P 667K

Weekend News

EUR:

German Pres. To meet with leads from SPD, CDU and CSU on Thursday attempt to break the deadlock

SPD’s Schulz says party will not play obstructionist role in Germany

SPD coalition with Merkel would need a member vote

Catalan leader doubles down on independence pledge

Merkel: Europe needs a strong Germany so needs a govt. in place

ZAR:

S&P downgrade and Moody’s puts S. Africa on review for downgrade

RUB/OPEC:

Are said to agree framework to extend oil cuts

USD:

New political status quo, big business bucks the right. WSJ

Jobs and inflation trends confound economic wisdom, clouding the picture for next year – WSJ

Harry Hindsight

• EUR: A quiet range around the 1.1850 levels through to the grey hour with the market dipping to below the 1.1840 level only before moving into the London session pushing steadily through the 1.1870 areas through early morning in London but the market had to wait for the US session before USD selling moved in with weaker PMI numbers lifting the Euro quickly through the 1.1880 levels, the market triggered some weak stops on the move to the 1.1900 areas and pushed through quickly to the 1.1910 levels before continuing to rise steadily through to top around the 1.1940 levels and drifting to the close back to the 1.1930’s before finishing just off the highs.
• GBP: A steady drift through the Asian session opening around the 1.3310 areas and slowly pushing into the grey hours testing the 1.3290 level, early sellers saw the market drop down to make the lows around the 1.3280 level before rising back to the 1.3300 into the London opening, and putting in a quick rally through to the 1.3325-30 areas to range a little into the NYK session, NYK numbers saw the Cable test above the 1.3350 level with a brief test off the 1.3360 levels before dropping quickly back as the London session finished, and ranging around the 1.3330 areas until a late last gasp move to the 1.3340 areas on the close.
• JPY: Limited range throughout the day with the market edging higher throughout for the most part, early Tokyo saw a rise from the opening around 111.20 to test through to the 111.45 level before struggling for a few hours before pushing again to extend the highs to the 111.50 level, the move into London saw the market drifting again and the market didn’t start to rise until the move into the NYK session initially selling USD on the US numbers before steadily rising through the balance of the session to make new highs for the day around the 111.60 area and becoming choppy into the close.
• AUD: A quiet range for the Oz throughout the day with the market opening around the 0.7625 level and seeing a quick stab to above the 0.7632 areas before drifting into the Tokyo session pushing through the 0.7620 areas but remaining in a tight 0.7615-25 range through into the London session, slow selling saw the Oz testing below the 0.7610 areas before starting to recover into the NYK session, and holding around the 0.7615-20 areas for the most part to the close.

Yesterday’s premiership results

NZD       Trade Balance Oct A -871M | C -750M | P -1143M | R -1156M

JPY         PMI Manufacturing Nov (P) A 53.8 | C 52.6 | P 52.8

EUR        German IFO Business Climate Nov A 117.5 | C 116.5 | P 116.7 | R 116.8

EUR        German IFO Expectations Nov A 111 | C 108.8 | P 109.1 | R 109.2

EUR        German IFO Current Assessment Nov A 124.4 | C 125 | P 124.8

USD       Manufacturing PMI Nov (P) A 53.8 | C 55 | P 54.6

USD       Services PMI Nov (P) A 54.7 | C 55.4 | P 55.3

Stay lucky

Andy

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