Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 112.506 | EURUSD 1.20142 | AUDUSD 0.78346 | NZDUSD 0.71061 | USDCAD 1.25364 | USDCHF 0.97698 | GBPUSD 1.35166 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.20230 | 1.20045

USDJPY                 112.780 | 112.470

GBPUSD               1.35237 | 1.35057

USDCHF               0.97807 | 0.97649

AUDUSD              0.78420 | 0.78147

USDCAD               1.25553 | 1.25296

NZDUSD               0.71104 | 0.70729

EURCHF                1.17532 | 1.17277

EURGBP               0.88931 | 0.8885

EURJPY                 135.445 | 135.138

For today

• EUR: A very quiet session with the market opening around the 1.2015 areas and contained within the 1.2005 early lowers and the 1.2020 areas for the most part with the market recovering into the later part of the session to those highs, downside bids light through the 1.2000 areas with possible weak stops on a dip through the 1.1980 level and then some light bids into the 1.1950 sentimental level and stronger congestive bids likely on any push towards the 1.1900 level and continuing through the level with mixture of stops on a dip. Topside offers into the 1.2040-60 areas were initially strong enough to hold the market and likely to have been replaced for short term plays a push beyond the 1.2080 area will likely see a mixture of offers and weak stops however, the closer the market moves towards the 1.2100 level the stronger those offers are likely to be.
• GBP: Opening around the 1.3515 level the market drifted around the 1.3510 areas for half of the session before pushing towards the 1.3520 levels and holing around the level through to the grey hours. Downside bids into the 1.3500 areas and slightly through however, congestion is limited and any push beyond the 1.3480 level is likely to see weak stops appearing in the market and the potential for a quick drop to the 1.3450 level and the market then seeing limited congestion through to the 1.3400 level and stronger bids appearing. Topside offers light through the 1.3550 areas with stronger offers then likely to reappear into the 1.3600 with possible option and profit taking from medium term types, a clear strong break through the 1.3600 level will likely see further offers appearing as the market pushes to the 1.3660 areas however, beyond that level the market does open up for a larger move back to the 1.3800 level where the market broke from the previous range so long ago.
• JPY: USDJPY pushed steadily higher from the opening around 112.50 area pushing through to the 112.70 levels in early trading and then struggling through to mid-session testing through the 112.75 level before drifting steadily back into the 112.65 areas through to the grey hours. Topside offers into the 112.80 levels and likely increasing into the 113.00 level with weak stops on a test through the 113.20 levels with stronger offers then starting to appear on any move towards the 113.50 levels and through with plenty of congestion then moving into the market from the 113.70-114.00 areas and continuing in the same manner, downside bids light through to the 112.20 levels with possible strong bids continuing into the 111.80 levels before weakness appears and stops likely to open a move through to the 111.00 where stronger bids are likely to appear.
• AUD: Opening around the 0.7835 level the market drifted off reversing yesterday’s gains before moving deeper into the session and then slowly rising through the opening and testing the 0.7840 level into the grey hours, as with the rest of the market limited volume news and so movement. Topside offers strong through the 0.7850 levels and likely to continue to the 79 cent areas and until that level breaks its difficult to see the market moving higher and seems to be key to the upside. Downside bids into the 0.7800 level likely to be light with stronger bids just beyond the level and into the 0.7775 areas with weak stops likely to appear on a move through to open a test to the 0.7730-20 areas.

Overnight News

GBP:

Eurozone’s fleeting boom is an illusion Britain won’t remain the sick man TEL

UK said to guarantee EU level farm grants post Brexit

USD:

Fed plans to raise rates in 2018 but lacks consensus on frequency

EUR:

The biggest risk to the Eurozone’s booming economy is inflation – DJC

Today’s data

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

JPY         PMI Manufacturing Dec (F) A 54 | C 54.2 | P 54.2

CNY        Caixin PMI Services Dec A 53.9 | C 51.8 | P 51.9

07:00     GBP       Nationwide House Price M/M Dec C 0.10% | P 0.10%

08:45     EUR        Italy Services PMI Dec C 54.7 | P 54.7

08:50     EUR        France Services PMI Dec (F) C 59.4 | P 59.4

08:55     EUR        Germany Services PMI Dec (F) C 55.8 | P 55.8

09:00     EUR        Eurozone Services PMI Dec (F) C 56.5 | P 56.5

09:30     GBP       Mortgage Approvals Nov C 64.1K | P 64.6K

09:30     GBP       Money Supply M4 M/M Nov C 0.40% | P 0.60%

09:30     GBP       Services PMI Dec C 54 | P 53.8

12:30     USD       Challenger Job Cuts Y/Y Dec P 30.10%

13:15     USD       ADP Employment Change Dec C 190K | P 190K

13:30     CAD       Industrial Product Price M/M Nov P 1.00%

13:30     CAD       Raw Materials Price Index M/M Nov P 3.80%

13:30     USD       Initial Jobless Claims (DEC 30) C 244K | P 245K

14:45     USD       US Services PMI Dec (F) C 52.4 | P 52.4

15:30     USD       Natural Gas Storage P -112B

16:00     USD       Crude Oil Inventories P -4.6M                                   

 

Harry Hindsight

• EUR: For the most part a steady drift lower over the full day, opening around the 1.2055 level the market made early gains to the 1.2065 area to make the highs of the day before drifting off to the 1.2045 level through into mid-session before rising through to the grey hours testing the opening levels again, early London were quick sellers and the market this time pushed to the 1.2040 level into the official opening and then slowly pushing to the 1.2030 before holding through the early German numbers quietly. Another push in early morning saw the market test the 1.2010 levels before slowly rising into the NYK session, with volumes much below par the market drifted through the NYK session dropping back to the 1.2005 level and bouncing back to the 1.2030 levels repeatedly before settling into the 1.2015 areas.
• GBP: Cable was held around the 1.3600 level through the Asian session probing repeatedly through the level and seeing plenty of two way interest however, the move towards the grey hours saw the market testing through the 1.3610 areas before early London stepped in and sent the market quickly back to the 1.3590 level, the market then held through into the early part of London and eventually started to slowly drift moving through into the NYK session testing the 1.3560 levels and once NYK moved in the market dropped back quickly with weak stops triggered on the way and tested quickly through the 1.3500 level before holding and regaining a little bit of composure to hold the 1.3520 for areas for a long track to the close.
• JPY: USDJPY took until the release of the FOMC minutes to make a move with the market opening around the 112.30 level and holding in a tight range around that level through until the release, not much volume however, on the release of the ISM numbers the market quickly broke to the 112.50 levels and repeated the move on the FOMC minutes to push to the 112.60 and to post the high before settling back a little to the close.
• AUD: Over the day a tight range and very limited action for the FX Market however, Oz was especially quiet with the market opening around the 0.7830 levels rising in early trading through towards the 0.7840 level before dropping quickly back to test the 0.7805 areas in early Asia, the market struggled off the lows to move into the grey hours pushing towards the 0.7825 level, the move into London saw the market recapture the opening and testing the highs again and so the market remained through to the close with minor deeper dips but generally in a narrow range.

Yesterday’s premiership results

CHF        PMI Manufacturing Dec A 65.2 | C 64.5 | P 65.1

EUR        German Unemployment Change Dec A -29K | P -13K | R -18K

EUR        German Unemployment Rate Dec A 5.50% | C 5.50% | P 5.60% | R 5.50%

GBP       Construction PMI Dec A 52.2 | C 53.1 | P 53.1

USD       Construction Spending M/M Nov A 0.80% | C 0.50% | P 1.40% | R 0.90%

USD       ISM Manufacturing Dec A 59.7 | C 58.2 | P 58.2

USD       ISM Prices Paid Dec A 69 | C 64.5 | P 65.5

USD       FOMC Meeting Minutes Dec

Any opinions, news, research, analyses, prices or other information contained on this Blog, whether by LMAX, its employees, partners or contributors, does not constitute investment advice nor has it been prepared in accordance with legal requirements designed to promote the independence of investment research. Further, the material contained within this Blog does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of, or solicitation for, a transaction in any financial instrument. Whilst information provided on this Blog may help with your investment research you must consider carefully whether you should make (or refrain from making) investment or other decisions based on what you see without doing further research on the investments you are interested in. Participating in this Blog cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you. LMAX has not verified the accuracy or basis-in-fact of any claim or statement made by any third parties as comments for every Blog entry.

LMAX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. No representation or warranty is given as to the accuracy or completeness of the above information. While the material produced in this Blog was obtained from sources deemed to be reliable, LMAX does not provide any guarantees about the reliability of such sources.

Consequently any person acting on it does so entirely at his or her own risk.

If you currently hold an account with LMAX for the purposes of trading FX and CFD’s, you are encouraged to use a different Username and Password to access the Blog or any other online systems. The Blog is a place to learn, discuss and share information and ideas with Blog followers. It is not a place to slander, use unacceptable language or to promote LMAX or any other FX, Spread Betting and CFD provider and any such postings, excessive or unjust comments and attacks will not be allowed and will be removed from the site immediately.