Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.833 | EURUSD 1.2218 | AUDUSD 0.79883 | NZDUSD 0.7276 | USDCAD 1.24973 | USDCHF 0.96406 | GBPUSD 1.3852 |

 

LMAX Ranges 6am London time

Highs    Lows

EURUSD               1.22655 | 1.22163

USDJPY                 110.900 | 110.520

GBPUSD               1.38995 | 1.38571

AUDUSD              0.80035 | 0.79791

USDCHF               0.96358 | 0.96005

USDCAD               1.24962 | 1.24761

NZDUSD               0.72893 | 0.72681

EURGBP               0.88328 | 0.88137

EURCHF                1.17943 | 1.1766

EURJPY                 135.738 | 135.35

For today

• EUR: The Washington closedown continues to weigh on the market with the USD off from Fridays close across the board, Euro opened around the 1.2265 areas and then went through a steady decline through the grey hours testing back to the closing rates on Friday, Topside offers light through the 1.2240-60 areas with stronger offers the closer the market moves to the 1.2290-1.2300 areas, possibility of topside offers just through the level and then seeing stronger offers as the market moves towards the 1.2340 areas and better stops likely through the level to open up a test into the 1.2400 level. Downside bids into the 1.2200 areas are likely to be limited but with those light bids extending through the 1.2180 before weak stops are likely to appear and the market quickly opening for a test below 1.2100 level.
• GBP: Not as exaggerated as the Euro however a similar pattern saw the Cable opening just off its highs above 1.3895 and then slowly drifting back to hold around the 1.3865 areas through into the grey hours. Topside offers likely to be a little stronger on any move through the 1.3900 areas with stronger offers moving in through 1.3940, weak stops on a strong break of the 1.3950 level could see a quick run to the 1.4000 level however, likely to see strong sentimental offers and congestion above the level. Downside bids light through to the 1.3800 areas with the level likely to have some consolidating qualities however a test through the 1.3750 areas will likely see weak stops through the level and the 1.3700 level quickly exposed with very little in the market until closer to the low 1.3600 levels.
• JPY: USDJPY opened around the 110.50 level before making slow movement into the Tokyo session and testing on the opening to the 110.80 level, the market drifted a little after the initial rally and then again ran to the highs with a steady grind through to the 110.90 into the grey hours. Congestion to the topside through the 110.90-111.10 areas with possible weak stops on a push through the with further congestion likely to soak up much of the move to the 111.50 areas with stronger offers then starting to appear on a run to the 111.80-112.00 levels. Downside bids into the 110.20-110.00 levels likely to be strong with strong stops possibly appearing on a move through the 109.80 areas with sentimental levels holding the key to a deeper move through to the 108.50 level.
• AUD: Opening a little higher from Fridays close the market traded back from above the 80 cent levels to test through to the 0.7980 level before holding quietly around the 0.7990 area through to the grey hours, Topside offers into the 0.8040 area and likely to extend a short level before stronger offers start to appear on a move towards the 81 cent level with stronger offers likely to continue through to 0.8150 before finding further resistance, downside bids through the 79 cent levels with stronger bids not suspected until closer to the 0.7850 areas with limited stops likely and the market then having to push below the 0.7780 areas to negate the move.

Overnight News

CNY:

Fresh doubts raised on China’s bad load data as fraud uncovered

Listed Chinese firms bought $192B worth of opaque investment products

USD:

Senate adjourns, Government shutdown continues

JPY:

Kuroda extends lead in guessing game for who will run the BoJ

Today’s data

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

13:30     CAD       Wholesale Trade Sales M/M Nov C 1.00% | P 1.50%

Weekend News

EUR:

German SDP back coalition talks with Merkel BBG

Merkel says her bloc will co-ordinate on negotiations Monday

Merkel welcomes result of SDP vote for coalition talks

Distrust and anger inside Germany’s rocky coalition talks – Spiegel

USD:

Trump urges change to Senate rule as shutdown enters second day

McConnel, Trump at odds on nuclear option BBG

China to be focus of US trade policy this year White House

The Hill: Senate group signals they are near a deal on shutdown

CNY/USD:

China urges US to abandon cold war mind set in bilateral ties bbg

GBP/EUR:

Macron raises hope for Britain’s post Brexit EU market access bbg

TRY/USD:

Turkish troops attack Kurds in Syria as US warnings ignored

Harry Hindsight

• EUR: Quiet through to the later part of the Tokyo session with the market initially ranging around the opening levels before pushing firmly above the 1.2250 levels on a run to the 1.2270 areas, the market drifted into the grey hours saw the market holding above the 1.2250 level, early London started the move through to the 1.2280 levels and the market held through into the early morning extending the gains to 1.2295 before starting a long steady decline through too deep into the NYK session falling back to base through to the close holding around the 1.2220 areas.
• GBP: Not so much difference for the Cable with early trading ranging around the 1.3900 levels and no real impetus in either direction, the news of on off Washington shut down saw the Cable pushing to the 1.3920 levels before returning to the opening levels into the grey hours, early London saw the market move up to the 1.3940 levels, as with the Euro the Cable saw a steady drift lower and the market dropping quickly on the break of the opening levels to dip to 1.3870 levels and then slowly drifting again through too deep in NYK holding the 1.3840 areas rising to the 1.3880 but edging lower again into the close.
• JPY: Holding through into the Tokyo session the market tested back to the opening levels but unable to push much beyond the 111.10 areas dipping into Tokyo to test through the 110.90 level before returning for a final push to the highs, the market then set into a steady drift lower through into the London session testing to the 110.50 level before ranging in the 110.50-75 levels through the rest of the day and lifting in the last hour to the 110.85 for the close.
• AUD: A little rise into the opening in Tokyo saw the Oz pushing through to the 0.8020 in early trading and touching the level repeatedly through into the London session, London were quick buyers through the level triggering some minor stops on a move towards the 0.8040 area however, once the market hit that area it fell back steadily through to the close with a narrow channel to finish the day on the 0.7990 level in what end up a tight range for the day.

Yesterday’s premiership results

NZD       Business NZ Manufacturing PMI Dec A 51.2 | P 57.7

EUR        German PPI M/M Dec A 0.20% | C 0.20% | P 0.10%

EUR        German PPI Y/Y Dec A 2.30% | C 2.30% | P 2.50%

CHF        Producer & Import Prices M/M Dec A 0.20% | C 0.40% | P 0.60%

CHF        Producer & Import Prices Y/Y Dec A 1.80% | C 2.10% | P 1.80%

EUR        Eurozone Current Account (EUR) Nov A 32.5B | C 31.3B | P 30.8B | R 30.3B

GBP       Retail Sales M/M Dec A -1.50% | C -0.90% | P 1.10%

CAD       Manufacturing Sales M/M Nov A 3.40% | C 2.00% | P -0.40% | R -0.60%

CAD       International Securities Transactions (CAD) Nov A 19.56B | C 15.76B | P 20.81B | R 20.77B

USD       U. of Mich. Sentiment (JAN P) A 94.4 | C 97 | P 95.9

Stay lucky

Andy

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