Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 110.306 | EURUSD 1.22982 | AUDUSD 0.80004| NZDUSD 0.73413 | USDCAD 1.24195 | USDCHF 0.95771 | GBPUSD 1.39997 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.23359 | 1.22903

USDJPY                 110.339 | 109.803

GBPUSD               1.40493 | 1.39975

USDCHF               0.95809 | 0.95417

AUDUSD              0.80190 | 0.79937

USDCAD               1.24276 | 1.24037

NZDUSD               0.73770 | 0.73489

EURCHF                1.17814 | 1.17626

EURGBP               0.87871 | 0.87687

EURJPY                 135.657 | 135.328

For today

• EUR: A quiet push through the 1.2300 level saw the market stalling for several hours into the 1.2315 level before popping higher late in the session to push towards the 1.2335 level dropping quickly back to the 1.2320 areas, Topside offers into the 1.2340 areas with possible stops just beyond and opening the market to further gains with a push through the 1.2360 levels, stronger sentimental offers likely on a push to the 1.2400 levels with the market then open to further strong gains. Downside offers light through to the 1.2220 level with strong bids likely into the area and through to the 1.2200 level with a breach of the level possibly causing a strong reversal of the current uptrend.
• GBP: Opening just above the 1.4000 levels the market saw a rise into the Tokyo session, testing towards the 1.4020 level before drifting for a short period and then as USD started to be sold the Cable slowly grinded through the offers above pushing through eventually to the 1.4049 level before dipping a little, A new day a new high it would seem and the wrangling’s over Brexit forgotten for the moment, Topside offers around the sentimental levels with 1.4100 likely to be the strongest point with congestion running through the level and continuing through to 1.4150, downside bids light with limited congestion around the 1.3900 areas and weak stops then through the level with strong bids likely into the 1.3850 levels.
• JPY: Good volumes and the USDJPY slowly pushed lower through the session with the market moving into the Tokyo session testing through to the 110.00 areas, some brief struggling back to the 110.25 levels before dipping again after the dovish Kuroda comments which obviously should have had the opposite effect however, the commentary was given in a nervous and cautious manner and may have undermined the comments themselves, the market continued to see retail sellers entering the market cutting back on long positions for the most part and the USDJPY slowly pushed through to the 109.80 areas before finding a limited base. Bids into the 109.60 levels are likely to slow the market with limited stops through the level and with some support likely to continuing through to the 109.35 areas before weak stops are likely to appear and congestion likely to continue to 109.00 levels. Topside offers light through to the 110.50 areas with weak stops through the level and congestion through to the 111.00 areas, even here though the market is light and any resistance is likely to be a continuation of retail selling with offers likely to increase to the 111.20 areas.
• AUD: The Oz has been very quiet through the session with limited topside movement even as the USDJPY was forced lower AUDJPY selling also entered the market place limiting any gains with the market moving off its opening lows around the 0.7995 area and pushing through to the 0.8015-18 areas only struggling in the area over the later part of the session before moving into the grey hours just off those levels, Topside offers into the 0.8030 level and likely to continue through a short distance, a push through the 0.8060 level could see weak stops appearing and the market testing towards the stronger 81 cent levels with congestion likely to continue through to the 0.8140 areas and likely to be key to a much larger gain with 2014 ranges opening. Downside bids light through to the 0.7950 areas with some limited congestion a dip through is likely to see weak stops appearing and the market quickly testing to the 0.7900 areas with minimal support, a push through the level will likely see some congestion on a move through to the 0.7860-40 areas with possibly stronger stops on a move through that level.

Overnight News

GBP:

UK expert who predicted the 2008 crash concludes we are heading for another financial meltdown

USD:

Trump’s message to Davos will be to invest in America and not that he’s withdrawing the US from the Global scene

US Senate confirms Jerome Powell as next Federal Reserve chairman

JPY:

Fresh tremors halt search operations after Japan volcano eruption

Japan’s record exports to Asia raise hopes for Q4 growth

CNY:

China’s premier Li calls for more targeted economic policy

Today’s data

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

AUD       Westpac Leading Index M/M Dec A 0.30% | P 0.10%

JPY         Trade Balance (JPY) Dec A 0.09T | C 0.27T | P 0.36T | R 0.29T

JPY         PMI Manufacturing Jan (P) A 54.4 | C 54.3 | P 54

08:00     EUR        France Manufacturing PMI Jan (P) C 58.6 | P 58.8

08:00     EUR        France Services PMI Jan (P) C 58.9 | P 59.1

08:30     EUR        Germany Manufacturing PMI Jan (P) C 63 | P 63.3

08:30     EUR        Germany Services PMI Jan (P) C 55.5 | P 55.8

09:00     EUR        Eurozone Manufacturing PMI Jan (P) C 60.3 | P 60.6

09:00     EUR        Eurozone Services PMI Jan (P) C 56.4 | P 56.6

09:30     GBP       Jobless Claims Change Dec C 2.3K | P 5.9K

09:30     GBP       Claimant Count Rate Dec P 2.30%

09:30     GBP       Average Weekly Earnings 3M/Y Nov C 2.50% | P 2.50%

09:30     GBP       ILO Unemployment Rate 3Mths Nov C 4.30% | P 4.30%

14:00     USD       House Price Index M/M Nov C 0.40% | P 0.50%

14:45     USD       US Manufacturing PMI Jan (P) C 55 | P 55.1

14:45     USD       US Services PMI Jan (P) C 54.4 | P 53.7

15:00     USD       Existing Home Sales Dec C 5.72M | P 5.81M

15:30     USD       Crude Oil Inventories P -6.9M

21:45     NZD       CPI Q/Q Q4 C 0.40% | P 0.50%

21:45     NZD       CPI Y/Y Q4 C 1.90% | P 1.90%

 

Harry Hindsight

• EUR: Opening around the 1.2265 area the market moved to test the 1.2275 level into the Tokyo session and struggled with the level throughout Asia and slipping back in the grey hours to test through the 1.2250 level, London were quick sellers testing the 1.2225 area before slowly rising through the German numbers ranging through the 1.2250 levels again and into the NYK session, with trade disputes now rising between China and the US the USD continued to come under pressure with Euro rising through the 1.2300 level dipping back after the initial break and then from the 1.2270 levels starting a steady rise through to the close just below the 1.2300 level.
• GBP: Asian session was reasonably quiet for the Cable with the market generally trading around the opening levels testing a couple of times just above the 1.4000 level but unable to push below the 1.3985 level, the move into the grey hours saw the market slipping lower with Cable moving into the London session testing the 1.3950 areas and holding around the level deep into the morning, the move towards the NYK session saw the Cable trigger some light stops on the move quickly through the 1.3950 level and testing quickly to the 1.3920 areas before bouncing on the opening in NYK and heading quickly to the 1.3950 level, the move through the NYK session saw the market slowly push higher in steps with mini spurts through to the 1.3990 level and then to 1.4025 before hitting some resistance and dropping quickly back to the 1.3975 level and a slow climb to the close.
• JPY: Early trading was limited as the market waited for the BoJ rate decision, the release saw no change with one dissenter in an 8-1 vote, the USDJPY dipped through to the 100.50 area on the announcement with the market trading back to the 110.80 level for the move into the grey hours, weak shorts were quick to be squeezed out as the market returned from Tokyo lunch and tested quickly through to the 111.15 levels before moving into the London session and a quick reversal pushing back to the 110.65 area and a slow drift towards the NYK session, the move through to the NYK session saw the market slowly drifting down to the 110.30 closing areas.
• AUD: Limited action for the Oz with the early market moving from the opening 0.8018 areas to test through to the 0.8030 level, the failure of the level saw the market dropping back quickly to the 80 cent level, holding for a brief period the market eventually slipped through the level and held through to the grey hours just above the 0.7980 areas, grey hours through to the London opening saw the market dropping back through to the 0.7960 level with a brief dip below and then holding into the NYK session quietly, NYK saw a slow rally through the balance of the day pushing towards the 80 cent and not really testing the area until into the close.

Yesterday’s premiership results

JPY         BoJ Rate Decision A -0.10% | C -0.10% | P -0.10%

JPY         All Industry Activity Index M/M Nov A 1.00% | C 0.90% | P 0.30%

GBP       Public Sector Net Borrowing Dec A 1.0B | C 4.2B | P 8.1B | R 6.6B

EUR        German ZEW (Economic Sentiment) Jan A 20.4 | C 17.9 | P 17.4

EUR        German ZEW (Current Situation) Jan A 95.2 | C 89.5 | P 89.3

EUR        Eurozone ZEW (Economic Sentiment) Jan A 31.8 | C 29.7 | P 29

GBP       CBI Trends Total Orders Jan A 14 | C 12 | P 17

EUR        Eurozone Consumer Confidence Jan (A) A 1 | C 1 | P 1

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