Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 111.061 | EURUSD 1.22024 | AUDUSD 0.79158 | NZDUSD 0.72553 | USDCAD 1.24602 | USDCHF 0.96743 | GBPUSD 1.37306 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.22388 | 1.21877

USDJPY                 111.173 | 110.576

GBPUSD               1.37557 | 1.37247

AUDUSD              0.79614 | 0.79069

USDCHF               0.96852 | 0.96527

USDCAD               1.24715 | 1.24371

NZDUSD               0.72826 | 0.72358

EURGBP               1.18148 | 1.17931

EURCHF                0.88990 | 0.8873

EURJPY                 135.677 | 135.021

For today

• EUR: Opening quietly and trading around the 1.2200 levels with a very tight range rising quickly in the final hour through to the 1.2240 levels on news that Germany will include reserves in Yuan, car sales for VW hitting new highs and BoJ news, having touched the 1.2240 levels the market dipped into the grey hours, the push above the 1.2120 levels has opened the next target as the 1.2300 areas with possibly strong offers through the level and possibly continuing through to the 1.2340 level with increasing offers likely through the level with possible weak stops on a move through the 1.2360 areas and sentimental values continue to contain offers. Downside bids light back to the 1.2120 levels with very little in between other than sentimental levels, a move through the 1.2100 level will likely see weak stops appearing and the market quickly testing through to the 1.2040-60 areas with better bids likely into the 1.2000 area.
• GBP: Hardly any movement for the Cable with the market opening around the 1.3735 areas and then rising through the 1.3740 areas only to trade in a very narrow band through to the grey hours, downside bids light through to the 1.3600 areas with bids starting to form in the area with weak stops on a move through the level and possibly better bids on a test back to the 1.3550 areas, a move through the level could see stronger sellers appearing and the chance of a strong drop. Topside offers into the 1.3750 levels with the market open to the 1.3800 technically with possible congestion on a move above the level with light stops possibly appearing on a push through, with US bank holiday it may not move that much however, one suspected that for Friday.
• JPY: USDJPY opened in line with Fridays close and pushed towards the 111.20 areas before moving into the Tokyo session and dropping quickly back through to the 110.90 level and then drifting through to the 110.70 areas and holding around that level through to late in the session before pushing lightly through the 110.60 areas on news that BoJ raises economic view for 3 of the 9 regions, downside bids just below the lows with some congestion through the level and possibly some stronger stops opening the way to a test of the 110.00 areas and possibly stronger bids however, congestion is likely to continue in some form through the level with stronger bids likely to appear on a test to the 109.60 areas, Topside offers light back through the 111.00 areas with light stops on a break higher and the market open to a weak run through to the 111.70 areas before meeting resistance and likely to continue through to the 112.00 with some stronger bids available.
• AUD: Oz opened below the 0.7920 areas the highs of last week, the move through into Tokyo saw the market move quickly higher with a slightly weaker TD report and the market pushing to the 0.7920 levels struggling for several hours and only pushing through as the market pushed towards the grey hours testing to the 0.7960 level before holding quietly. With the 79 cent cleared the market has a congested run available to the topside with offers likely to continue through to the 0.8020 areas before stronger offers start to appear in the market, downside bids light back through the 79 cent level with possible stops on a push through the 0.7880 areas and the market then open to a test back to the 0.7840 level before increasing bids appear on a run to the 78 cent level.

Overnight News

USD:

Trump softens on NAFTA

US government shutdown deadline is at the end of this week

JPY:

BoJ reports 3 of 9 regions see increasing economic improvement

BoJ’s Kuroda sticks with pledge to maintain massive stimulus

Japan’s Abe seeks to drum up EU pressure on N. Korea

GBP:

UK Govt. keeps close eye on struggling firm Carillion

Today’s data

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

JPY         Japan Money Stock M2+CD Y/Y Dec A 3.60% | C 4.00% | P 4.00%

AUD       TD Securities Inflation M/M Dec A 0.10% | P 0.20%

10:00     EUR        Eurozone Trade Balance (EUR) Nov C 22.4B | P 19.0B

Weekend News

USD:

Change in shift has Hawaii running for the shelters with reported ICBM inbound

EUR:

Merkel and Macron in Davos for epic clash with Trump

CNY:

China absence looms over Canada meeting on how to pressure N. Korea

GBP:

Scottish leader says will look at independence vote by end of year

Harry Hindsight

• EUR: Moving through into the Tokyo session was quiet and lifting quickly through to the 1.2065 area before slipping back to hold just above the 1.2040 areas through to the London session with a minor move in the grey hours pushing towards the 1.2070 areas, with the movement in the Cable from the opening the Euro was dragged higher trading quickly to the 1.2120 levels and struggling with the level for several hours eventually pushing above the 1.2150 areas and deep into the NYK session before renewing its rally in an attempt to catch the movement of the Cable, the market pushed in the last hour to test above the 1.2200 areas spiking on weak stops towards 1.2220 before settling back a little into the close.
• GBP: Opening around the of 1.3540 areas the market struggled until the move into the Tokyo session before again reversing back to the opening levels having tested above the 1.3560 levels, the move into the London session saw the market lifting higher with a quick move through the 1.3600 levels, the market then struggled slowly higher but it did continue to rise with the market moving into the NYK session holding the 1.3640 levels, US numbers saw a gyration in the market with the market dipping initially to the 1.3610 areas before spiking quickly through last year’s high and pushing to above the 1.3690 level before dipping a little and renewing the steady march higher, testing into the London close just below the 1.3700 areas the market eventually broke through the level testing to the 1.3740 levels through to the close. Talk of a second referendum for Brexit was broached with Nigel Farage explaining last week that it was needed to finally silence the Remainers however, from Friday onwards the story grew out of proportion as those remainers took it as a sign of weakness however, article 50 is signed and delivered and for the moment there is no going back.
• JPY: Trading quietly around the opening 111.25-30 areas through to the grey hours before breaking a little higher through the 111.40 areas the move into the London session saw strong buying in Cable and Euro and the USDJPY was forced initially down to the 111.00 areas and basing along that level through to the NYK opening, the market immediately rose from the US numbers testing quickly through the 111.50 level and then pushing a little slower to the 111.70 level before starting a steady drift lower through the balance of the session to test back to the 111.00 areas and trading around that level through to the close with the market unable to push beyond the 110.90 levels.
• AUD: Given the movement in other currencies the Oz was quiet although the range was a little more than we have seen generally this year with the market opening around the 0.7890 and pushing above the 79 cent level into the Tokyo session before slowly drifting through the Asian session and continuing through into London, US numbers saw the Oz dipping to the 0.7850 level before reversing quickly and steadily rising through the balance of the session pushing to a close just above the 0.7920 area dipping only slightly into the close.

Yesterday’s premiership results

NZD       Building Permits M/M Nov A 10.80% | P -9.60% | R -10.40%

JPY         Current Account Total (JPY) Nov A 1.70T | C 2.19T | P 2.44T

CNY        Trade Balance (USD) Dec A 54.7B | C 37.4B | P 40.2B

CNY        Trade Balance (CNY) Dec A 362B | C 235B | P 264B

JPY         Eco Watchers Survey Current Dec A 53.9 | C 55.1 | P 55.1

USD       CPI M/M Dec A 0.10% | C 0.10% | P 0.40%

USD       CPI Y/Y Dec A 2.10% | C 2.10% | P 2.20%

USD       CPI Core M/M Dec A 0.30% | C 0.20% | P 0.10%

USD       CPI Core Y/Y Dec A 1.80% | C 1.70% | P 1.70%

USD       Retail Sales Advance M/M Dec A 0.40% | C 0.40% | P 0.80% | R 0.90%

USD       Retail Sales Ex Auto M/M Dec A 0.40% | C 0.40% | P 1.00% | R 1.30%

USD       Business Inventories Nov A 0.40% | C 0.30% | P -0.10% | R 0.00%

Stay lucky

Andy

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.