Daily FX Market Commentary

Andy Harrison

Good morning,

LMAX Close

USDJPY 109.405 | EURUSD 1.25071 | AUDUSD 0.80387 | NZDUSD 0.73848 | USDCAD 1.22669 | USDCHF 0.92651 | GBPUSD 1.42624 |

LMAX Highs and Lows 6am GMT

                                High | Low

EURUSD               1.25156 | 1.24891

USDJPY                 109.703 | 109.28

GBPUSD               1.42784 | 1.42509

USDCHF               0.92753 | 0.72559

AUDUSD              0.80442 | 0.79954

USDCAD               1.22866 | 1.22564

NZDUSD               0.74065 | 0.73627

EURCHF                1.15957 | 1.15795

EURGBP               0.87712 | 0.87576

EURJPY                 137.087 | 136.669

For today

• EUR: Very limited trading from the opening with the market unable to push beyond the 1.2515 levels the market then drifted through the session in a narrow range to base along the 1.2490 level through to the grey hours, Topside offers through the 1.2540 levels and with a push through the 1.2560 level likely to see some weak stops appearing and the market pushing towards the 1.2590 levels with possibly stronger offers in the area, some limited congestion on a move through the 1.2600 areas and the push through the level could see stronger buying on a move through the 1.2620 areas and the market opening through to the stronger 1.2700 areas and the topside vulnerable to further moves. Downside bids light through to the 1.2400 areas with weak stops on a move through the 1.2380 level likely to see stronger stops appearing and the market opening to weak bids through into the 1.2200 areas.
• GBP: A stronger range for the Cable however, the pattern was similar to the Euro with the market holding around the 1.4265 area opening, the market tested above the 1.4275 levels with the market and heading into the grey hours around the 1.4260 level. Topside offers into the 1.4300 levels likely to be light but increasing on a move through towards the 1.4340 areas, a push through the 1.4350 area will likely see stronger stops appearing and the market opening to further congestion towards the 1.4400 levels with the likely congestion pushing through to the stronger 1.4500 areas, downside bids light through to the 1.4100 level with bids possible in the area however, stronger support is not likely to be seen until closer to the 1.4000 areas with strong stops likely on a push below the 1.3980 areas to open a greater fall.
• JPY: Opening around the 109.40 levels the market struggled into the Asian session before jumping quickly above the 109.60 level before falling immediately back to the 109.30 areas and rising back through to the 109.70 area on a second push slightly slower than the first the market continued to move around a little however, the USDJPY was unable to push through even though the market didn’t back off from the level holding around the areas to the grey hours, downside bids through the 109.00 level area and increasing down towards the 108.50 areas and through to 108.20 even through the level the possibility of further buying entering the market continues with only a break below the 107.80 really opening the downside to some extent, topside offers into the 109.80 areas increasing in that area however a push through the 110.00 level is likely to see strong stops appearing and the market likely to quickly rise through to the 110.50 areas before finding congestion through the level and continuing into the 111.00 areas, continuing weak offers to 111.40 level is then likely to see stops appearing and the market opening to a move towards and through the stronger 112.00 level.
• AUD: Having recovered from the lows yesterday the opening saw the reverse of that recovery with the market dropping steadily through to test the 0.8000 levels pushing just through the area and basing along that level to the grey hours. The market continues to consolidate around the 80 cent areas with no clear indication yet of pushing to far, topside offers increase on any move to the 81 cent level with congestive offers likely to increase on a move through the level, a push through of the 0.8140 area could see stops appearing and a quick move to test towards the 0.8180 areas with increasing offers and possibly light option plays in the area. Downside bids through the 80 cent areas and while there maybe some weak stops below the 0.7980 levels the congestive bids are likely to continue through to the 0.7940 areas before weak stops appear and the market opens to a quick test of the 79 cent level however, While its been about 8 weeks to move from the 75 cent areas to the 80 cent level the downside is not likely to give way and any movement in that direction will be in the same manner one would imagine.

Overnight News

JPY:

Japan raids hacked crypto exchange, bitcoin plunges further

USD:

Janet Yellen, Fed’s first woman chair, gets emotional farewell

EUR/GBP:

Trade deal with Britain must prevent unfair tax, labour competition EU

EUR:

Deutsche Bank fined $70m for trying to rig benchmark rate

GBP:

Britain proposes unlimited fines for car emissions cheaters

Today’s data

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

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

JPY         Monetary Base Y/Y Jan A 9.70% | C 11.00% | P 11.20%

AUD       PPI Q/Q Q4 A 0.60% | P 0.20%

AUD       PPI Y/Y Q4 A 1.70% | P 1.60%

09:30     GBP       Construction PMI Jan C 52 | P 52.2

10:00     EUR        Eurozone PPI M/M Dec C 0.20% | P 0.60%

10:00     EUR        Eurozone PPI Y/Y Dec C 2.30% | P 2.80%

13:30     USD       Change in Non-farm Payrolls Jan C 180K | P 148K

13:30     USD       Unemployment Rate Jan C 4.10% | P 4.10%

13:30     USD       Average Hourly Earnings M/M Jan C 0.30% | P 0.30%

15:00     USD       Factory Orders Dec C 0.90% | P 1.30%

15:00     USD       U. of Mich. Sentiment Jan (F) C 95 | P 94.4

 

Harry Hindsight

• EUR: Limited movement through the Asian session with the market moving off a low opening just below the 1.2410 levels and heading slowly through towards the 1.2425 areas and unable to push through the level, the market slipped only back to the 1.2405 areas in reasonably quiet trading before holding towards the highs, the grey hours saw the market test through to the 1.2385 levels with early Europeans taking the market to its day’s lows before London moved in and pushed the market immediately back and through the 1.2425 areas the PMI numbers then appeared with generally stronger town with really only the German number slightly lower, the market managed to gain the 1.2450 levels before holding around the level into the NYK session, Unit labour costs grew in the US and was ignored with a flat PMI number the USD failed to inspire and the Euro steadily climbed from the numbers in the US saw the market testing through the 1.2500 levels topping around the 1.2520 levels before drifting a little too the close. With late comments from Nowotny on the subject of ending the bond buying program and hopefully bringing a rise in long term interest rates raising the prospect of higher volatility with the vagueness of the comments.
• GBP: Opening around the 1.4190 levels the market edged slightly higher into the Tokyo session rising to the 1.4210 levels before ranging quietly through to the grey hours in an ever decreasing range, the move into the grey hours saw the market dipping through to the 1.4160 areas before holding and rising quickly into the London opening pushing to the 1.4240 levels before running into some offers around the 1.4250 level slowly the ascent a little on its test to the 1.4275 levels, the move through the balance of the morning was a slow drift towards the 1.4200 levels moving into the NYK session, a slight dip through figure level before recovering quickly through to the 1.4250 level and then ranging steadily higher through the balance of the session testing through to finish the day on its highs.
• JPY: USDJPY struggled through into the Tokyo session testing to the 109.10 levels before finding some supportive buying moving in and the market pushing to the 109.40 holding in that area deep into the session the market only slipped through late in the session holding around the 109.30 areas before starting a quick rise into the grey hours to test into the London session pushing through the 109.60 levels, limited action through the morning session and the move towards the NYK session saw the USDJPY slowly rise through the 109.70 levels to make the highs for the day, the move into NYK saw the buying disappear and dropping quickly back to the 109.30 levels before the balance of the US numbers were released the range through to the close was fairly wide and choppy testing between the 109.25-60 level to finish somewhere in the middle.
• AUD: Oz saw some downside pressure through the early part of the Asian session dipping to the 0.8035 level having made early highs just above 0.8065 level, the move into the grey hours saw the Oz again under pressure with the market triggering some weak stops on a dip through the lows and trading to the London opening holding the 0.8005 areas, the opening in London saw day traders pushing to the 0.8025 levels and the market held through early morning before making a secondary move testing through to the 0.7990 levels before again finding some support, the move through the balance of the day was a steady climb through to the 0.8040 areas and unable to push much further.

Yesterday’s premiership results

AUD       Import price index Q/Q Q4 A 1.50% | C 1.50% | P -1.60%

AUD       Building Approvals M/M Dec A -20.00% | C -7.60% | P 11.70% | R 12.60%

JPY         PMI Manufacturing Jan (F) A 54.8 | P 54.4

CNY        Caixin PMI Manufacturing Jan A 51.5 | C 51.5 | P 51.5

CHF        SECO Consumer Confidence Jan A 5 | C 2 | P -2

CHF        Retail Sales Y/Y Dec A 0.60% | C 1.50% | P -0.20%

CHF        PMI Manufacturing Jan A 65.3 | C 64.1 | P 65.2

EUR        Italy Manufacturing PMI Jan A 59 | C 57.3 | P 57.4

EUR        France Manufacturing PMI Jan (F) A 58.4 | C 58.1 | P 58.1

EUR        Germany Manufacturing PMI Jan (F) A 61.1 | C 61.2 | P 61.2

EUR        Eurozone Manufacturing PMI Jan (F) A 59.6 | C 59.6 | P 59.6

GBP       PMI Manufacturing Jan A 55.3 | C 56.5 | P 56.3 | R 56.2

USD       Challenger Job Cuts Y/Y Jan A -2.80% | P -3.60%

USD       Nonfarm Productivity Q4 (P) A -0.10% | C 1.10% | P 3.00% | R 2.70%

USD       Unit Labour Costs Q4 (P) A 2.00% | C 1.00% | P -0.20% | R -0.10%

USD       Initial Jobless Claims (JAN 27) A 230K | C 236K | P 233K | R 231K

USD       Manufacturing PMI Jan (F) A 55.5 | C 55.5 | P 55.5

USD       Construction Spending M/M Dec A 0.70% | C 0.40% | P 0.80%

USD       ISM Manufacturing Jan A 59.1 | C 58.6 | P 59.7

USD       ISM Prices Paid Jan A 72.7 | C 69.5 | P 69

USD       Natural Gas Storage A -99B | C -102B | P -288B

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.