Daily FX Market Commentary

Andy Harrison

Good Morning,

LMAX Close

USDJPY 108.674 | EURUSD 1.11289 | AUDUSD 0.6911 | NZDUSD 0.66348 | USDCAD 1.31661 | USDCHF 0.99339 | GBPUSD 1.23835 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD              1.11385 | 1.11252

USDJPY                108.714 | 108.423

GBPUSD              1.23838 | 1.23619

USDCHF               0.99418 | 0.9917

AUDUSD             0.69164 | 0.6903

USDCAD              1.31731 | 1.3158

NZDUSD              0.66403 | 0.66267

EURCHF               1.10574 | 1.1046

EURGBP              0.90028 | 0.89849

EURJPY                120.956 | 120.759

For Today

• GBP: A slow drift through the Asian session opening around the 1.2380 level and dipping through to the mid 1.2360’s in late trading to hold around the level for the move into London, downside sees an old trendline through the current low and then congestion on any dips towards the 1.2300 area and continuing through the level if somewhat lighter bids, weak stop likely to appear and possibly absorbed by the bids to at least slow any descent towards the 1.2200 and stronger bids before weakness opens the downside and a deeper move, topside offers light through to the 1.2500 level with possible weak stops on a push through the 1.2420 areas and a light potential for a small short squeeze, a push through the 1.2500 level is likely to see strong offers through to the 1.2520-30 area before weak stops appear and the market opens a little to the 1.2600 and stronger offers.
• JPY: Opening unchanged the market drifted through into the Tokyo session dipping back to the 108.60 level from just below the 108.70 area strong selling appeared after a couple of hours with the market dropping back steadily through to the 108.40 areas before starting a slow recovery again through to the 108.60 areas for the move into the London session, downside bids light through to the 107.20 area where they are likely to increase through to the 106.80 level with possibly strong stops through the level with congestion through to the 106.00 area but only likely to slow the decline rather than stop it. Topside congestion through to the 108.80-109.00 level where offers are likely to be stronger, a break above the 109.20 level is likely to run into congestion and stronger offers into the 109.35-60 level.
• AUD: A quiet range bound day with the market attempting to test the 69 cents level on a couple of occasions before moving off the level and back to range around the 0.6910 level with only a single push to the 0.6916 level before drifting again to hold quietly into the London session around the 0.6905 areas, downside bids strong into the figure level with weak stops on a dip through the 0.6880 areas with congestion then appearing around the 0.6850 areas with stronger bids then appearing on a dip through to the 0.6930 level, possible weak stops in the mix and then increasing bids into 68 cents. Topside offers lightly through to the 0.6950 areas with congestion then building from that point up the offers increase through to the 70 cents level with strong offers likely to increase through to the 0.7030 areas with limited stops and congestion likely to continue.
• EUR: From the opening around the 1.1130 level the market edged slowly higher through into early morning in Tokyo testing towards the 1.1140 level before stopping and drifting steadily back to the opening level to test towards the 1.1125 into the grey hour, downside congestion limited through to the stronger 1.1120 area with a push through to the 1.1100 areas, although cleared yesterday day traders may still be hanging around, likely to see weak stops on any dip through the level and increasing sellers through the 1.1080 level with dated congestion from pre 2017 as the market aims for lower levels. Topside offers light through to the 1.1200 areas before some resistance is likely to be seen however, a push through the 1.1220 area could see some limited squeeze higher  and stronger offers not appearing until the market starts to move through the 1.1260 areas and increasing in size on a test towards the 1.1300 level.

Overnight News

EUR:

EU to strip five countries of some market access rights FT

Sueddeutsche Zetung on the need for Merkel to decide on a successor – DPA

USD:

Trump rejected proposal to weaken USD through market intervention DJ#

AUD:

Westpac aggressively responds to CBA, ANZ rate cuts AFR

RBA could go again if inflation disappoints – AFR

USD/CNY:

Talks set to resume as neither seems eager for a deal BBG

GBP:

UK starts no deal Brexit meetings as its now a real prospect BBG

Today’s Data

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

JPY         Retail Trade (YoY) (JUN) A 0.5% | C 0.2% | P 1.3%

JPY         Retail Trade s.a. (MoM) (JUN) A 0.0% | C -0.3% | P 0.4%

JPY         Large Retailers’ Sales (JUN) A -0.5% | C -0.6% | P -0.5%

08:30     GBP        Net Consumer Credit (JUN) C 0.9b | P 0.8b

08:30     GBP        Consumer Credit (YoY) (JUN) P 5.6%

08:30     GBP        Net Lending Sec. on Dwellings (JUN) C 3.5b | P 3.1b

08:30     GBP        Mortgage Approvals (JUN) C 65.8k | P 65.4k

08:30     GBP        Money Supply M4 (MoM) (JUN) P -0.1%

22:45     NZD       Building Permits (MoM) (JUN) P 13.2%

23:30     JPY         Jobless Rate (JUN) C 2.4% | P 2.4%

23:50     JPY         Industrial Production (YoY) (JUN P) C -2.0% | P -2.1%

Harry Hindsight

• GBP: A slow drift lower through most of the session and dipping away faster on the move into the NYK session as chances of no deal Brexit took a step closer with categorical refusal for negotiations on the part of the EU driving Boris Johnson to his desired goal, Opening just above the 1.2450 level the market eased through in quiet trading to just above 1.2440 into the London session with quick selling on the opening trading the market through to range in the 1.2425-35 areas with a limited push eventually through to the 1.2445 in midmorning before again pushing through to hold the 1.2425 areas for the move into the NYK session and dipping to 1.2415 bouncing and then running strongly through the 1.2400 level to hold around 1.2380-85 areas to the close.
• JPY: Very quiet and limited range for the day on the USDJPY, opening around the 108.65 areas the market pushed into Tokyo rising slowly then quickly spiking to the 108.75 areas but unable to capitalize on the couple of attempts higher and drifting through to midsession testing to the 108.55 levels before starting a slow steady rise through deep into the London session pushing back to the 108.70 areas and again unable to push, NYK faired better with a strong push through the congestion to just above the 108.80 level dropping back quickly and then running again with the same result before holding steadily around the 108.70 level through to the close around the opening level.
• AUD: Opening around the 0.6950 areas the highs were quickly made into the Tokyo session pressing the 0.6955 level before starting a slow steady drift through into the London session trading steadily through to the 0.6930 level and holding through to the NYK session before dropping for the final time to attempt the 69 cents level and holding quietly through to the close around the 0.6910 level not quiet able to break the level.
• EUR: Holding its opening levels for the most part through the Asian session pushing lightly through to the 1.1150 level and struggling with the level through to the London session before starting a slow drift through to the 1.1135 areas, a short period of quiet ranging around the level saw the market eventually push through to the opening levels before dropping back a little quicker this time to 1.1130, the choppy period continued through into the NYK session with the market dipping further after each successive rally and eventually testing to the 1.1115 areas to make the lows into the London close and once that session was out of the say the market slowly rose back to the 1.1130 level for the close.

Yesterday’s Premiership results

JPY         Tokyo Consumer Price Index (YoY) (JUL) A 0.9% | C 1.0% | P 1.1%

EUR        German Import Price Index (MoM) (JUN) A -1.4% | C -0.8% | P -0.1%

EUR        German Import Price Index (YoY) (JUN) A -2.0% | C -1.5% | P -0.2%

EUR        ECB Survey of Professional Forecasters

MXN      Economic Activity IGAE (YoY) (MAY) A -0.4% | P -1.4%

USD        Revisions: National Income and Accounts (GDP)

USD        Gross Domestic Product Annualized (QoQ) (2Q A) A 2.1% | C 1.8% | P 3.1%

USD        Personal Consumption (2Q A) A 4.3% | C 4.0% | P 0.9%

USD        Gross Domestic Product Price Index (2Q A) A 2.4% | C 1.9% | P 0.9% | R 1.1%

USD        Core PCE (QoQ) (2Q A) A 1.8% | C 2.0% | P 1.2% | R 1.1%

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