Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 109.639 | EURUSD 1.13056 | AUDUSD 0.70931 | NZDUSD 0.67639 | USDCAD 1.33525 | USDCHF 0.99631 | GBPUSD 1.3064 |

LMAX highs and Lows 06.00 GMT

                                Highs | Lows

EURUSD               1.13156 | 1.30004

USDJPY                 109.699 | 109.523

GBPUSD               1.31302 | 1.30538

USDCHF               0.99669 | 0.99554

AUDUSD              0.70949 | 0.70776

USDCAD               1.33616 | 1.3347

NZDUSD               0.67668 | 0.67538

EURCHF                1.12685 | 1.12619

EURGBP               0.86559 | 0.8618

EURJPY                 124.086 | 123.792

For Today

  • GBP: Early rally saw Tokyo taking the Cable quickly from the rising 1.3075 level through to the 1.3130 levels before finding offers standing in the way dipping back through to the 1.3110 level the market then struggled a little for direction holding around the level and through mid-session pushing slowly back to the highs to test to the 1.3135 level on the run to the grey hours, Topside offers through the 1.3180 level and the highs from Nov looking a little vulnerable, a push through the 1.3200 area will likely see stops appearing through into the 1.3250 congestive area however, once through the level the market opens a little technically with sentimental values taking over, downside a little weak back through the 1.3100 and opening the market to weakness through to the 1.3020-1.3000 levels and possibly stronger bids starting to build in the area, with congestion possibly just through the level before stops start to appear and the market opens to the 1.2900 levels again.
  • JPY: GBPJPY buying into the early Tokyo session lifted the USDJPY off its lows around the 109.50 area and a gradual climb through the session initially to the 109.80 level before dipping and then running again to extend the highs to just below the 110.00 level before drifting through to the grey hours holding on just below the 109.80 areas. Topside offers into the 110.00 level is likely to be strong however, the longer the market remains in the area and sniping at the level the larger the weak stops are likely to be on a break through, any break through 110.20 is likely quickly to test through the 110.50 level with some two way interest in the area only likely to slow the move and the market likely to be open to the 110.80-00 level before stronger offers curb the move. Downside bids congested through to the 109.00 areas again with a push through the level seeing weak stops however, unlike the topside the congestion is likely to be fairly deep and continue all the way through to the 108.00 levels.
  • AUD: Mixed early start with the market attempting the downside twice in pre-Tokyo then just after the opening and each time bouncing off the 0.7075 areas and eventually pushing back above the 0.7110 level and back to ranging lightly around the 71 cents level through to the grey hours, downside bids remain just below the 0.7080 levels with possible weak stops on a move through the 0.7070 level and the market then congested through the sentimental 0.7050 area however the market will likely see strengthening bids into the 0.7020 areas and although the market looks weak through there I very much doubt there’d be a repeat performance of the flash crash at the beginning of the month and steady buying into the 70 cents level. topside offers likely to increase on any push through the 0.7140 level with 0.7180-0.7220 particularly strong with large stops possibly through the level however, topside space is limited.
  • EUR: A slow lift away from the 1.1300 opening areas to push to the 1.1325 level in very quiet trading, the move through to the grey hours saw several hours of light trading around the 1.1320-25 area. Congestion remains to the downside and the market seems to really like this 1.1280-1.1480 area having traversed it multiple times over the past 3 months, for the moment any move to the downside is likely to see stronger bids moving in around the 1.1350 level and continuing through to the 1.1280 areas possible strong stops through the level could see the market opening as new lows for the year appear however, the downside still remains bids on any further selling, topside offers seem to be weakly congested until the market moves back above the 1.1400 level with any movement towards the 1.1450 area likely to find increased selling appearing, a push through will not alleviate the situation with the likelihood of stronger offers on any attempt to push for the 1.1480-1.1500 levels.

 

Overnight News

USD/CNY:

US Warships pass through Taiwan strait amid China tensions

GBP:

UK launches inquiry to find advantages for banks in Brexit

EUR:

European bank mergers are alive in Davos executives’ dream deals

BoI warns of big hit to GDP if no deal Brexit happens

AUD/CNY:

China detains Australian on suspicion of endangering security RTRS

OIL:

Oil price jumps on US threatening Venezuela with sanctions RTRS

GBP/CHF:

UK and Switzerland agree post Brexit deal for insurers – RTRs

 

Today’s Data

Actual A | Consensus C | Previous P | Revised R | all timings GMT/UTC

JPY         Tokyo CPI Core Y/Y Jan A 1.10% | C 0.90% | P 0.90%

09:00     EUR        German IFO Business Climate Jan C 100.6 | P 101

09:00     EUR        German IFO Expectations Jan C 97 | P 97.3

09:00     EUR        German IFO Current Assessment Jan C 104.2 | P 104.7

09:30     GBP       BBA Loans for House Purchase Dec C 39.0K | P 39.4K

11:00     GBP       CBI Reported Sales Jan C 2 | P -13

 

Harry Hindsight

  • GBP: A slow rise through into Tokyo to test the 1.3095 levels failed to follow through and drift back through the Asian session to the opening levels for the move into the grey hours, early selling saw the market dropping back into the London opening testing through the 1.3050 level and continuing through to the 1.3030 level before finding some minor interest appearing, a slight rally saw the steady selling reappearing and the move through to the NYK session saw the lows for the day for the first time pushing through to test the 1.3015 level trading in the area for a couple hours the market eventually rose through to test the 1.3050 level and the move to the London close and the second attempt to test the lows, the result was the same and the market having rejected the level for a second time rose pushing back through 1.3050 and never looked back on a move through to late into the session holding around the 1.3060 areas to the close.
  • JPY: Limited through the day and slightly choppy with the early trading seeing the market testing to the Tokyo session to the 109.50 level and quickly bouncing on the opening in Tokyo to push back to 109.65, Tokyo fix saw some strong supply appear and the market quickly tested through to the 109.45 areas before rising steadily for the move into the grey hours and early buyers pushing the market through to the 109.70 levels, London were limited in views with initial selling turning quickly into a solid push to the 109.80 level and failure, drifting through to the NYK session saw strong USD selling appearing and the market dropping back with a weak initial jobless claims number doing very little to temper the sellers and only better PMI numbers turning the USD higher after touching slightly through the lows in Asia, before trading back to centre more around the 109.60 in a lacklustre finish to the day.
  • AUD: All about the details as usual for the Oz employment numbers, opening around the 0.7140 levels the early buyers eased the market to the 0.7150 areas, headline number of 21.6K vs. 18.1K est. saw the market snap higher and push through towards the 0.7170 level before the market focused on the part time employment number which while not a bad thing showed 24.6K rise and the point took time to filter through however, strong selling appeared after a couple of hours and Oz quickly dropped through to the 0.7120 levels and the market paused with plenty of two way flow going through however, the market eventually gave way and the move through to the grey hours was all one way with the market then holding through to deep into the London session before dipping through to the 0.7090 levels, the 71 cents level remained the focus for the balance of the London session with late NYK trying to push the 0.7080 areas once London was gone however, for the moment the market held its nerve and slowly pushed back into the 0.7090’s for the move to the close.
  • EUR: A very slow Asian session with the Euro pushed slowly from the opening levels to test lightly above the 1.1390 areas and trading in the 1.1380-90 for the bulk of the session with weakness starting to show only once the early London players started to move into the market, the release of the French PMI numbers set the tone for the rest and the market dropped quickly from the 1.1370 levels through to 1.1340 level with the Services number moving into a declining level, German PMI manufacturing saw a decline and as they say that was game set and match with the market moving down through the session to hold just above the 1.1300 for the rate decision, unchanged as expected saw brief comments helping the market to lift almost to the opening levels however, the market was not convinced and the downside called strongly with the market dropping steadily through the London close and the US sellers taking it through the 1.1300 level and into the congestion holding through to the close around the figure area.

 

Yesterday’s Premiership results

AUD       Employment Change Dec A 21.6K | C 18.1K | P 37K

AUD       Unemployment Rate Dec A 5.00% | C 5.10% | P 5.10%

AUD       Part Time Employment Change Dec A 24.6K | P 43.4K

JPY         PMI Manufacturing Jan (P) A 50 | P 52.6

EUR        France Manufacturing PMI Jan (P) A 51.2 | C 50 | P 49.7

EUR        France Services PMI Jan (P) A 47.5 | C 50.5 | P 49

EUR        Germany Manufacturing PMI Jan (P) A 49.9 | C 51.4 | P 51.5

EUR        Germany Services PMI Jan (P) A 53.1 | C 52.2 | P 51.8

EUR        Eurozone Manufacturing PMI Jan (P) A 50.5 | C 51.3 | P 51.4

EUR        Eurozone Services PMI Jan (P) A 50.8 | C 51.5 | P 51.2

EUR        ECB Rate Decision A 0.00% | C 0.00% | P 0.00%

EUR        ECB Press Conference

USD       Initial Jobless Claims (JAN 19) A 199K | C 215K | P 213K | R 212K

USD       US Manufacturing PMI Jan (P) A 54.9 | C 53.5 | P 53.8

USD       US Services PMI Jan (P) A 54.2 | C 54.1 | P 54.4

USD       Leading Index Dec A -0.10% | C -0.10% | P 0.20%

USD       Natural Gas Storage A -163B | C -145B | P -81B

USD       Crude Oil Inventories A 8.0M | C -0.2M | P -2.7M

 

*US numbers affected by Government shutdown so may not appear when they are supposed to.

 

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LMAX Exchange Market Commentary   Andy Harrison  

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LMAX Group 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 produced information was obtained from sources deemed to be reliable, LMAX Group 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. It is not a place to slander, use unacceptable language or to promote LMAX Group or any other FX 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.