Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close

USDJPY 108.602 | EURUSD 1.11554 | AUDUSD 0.68722 | NZDUSD 0.6614 | USDCAD 1.31521 | USDCHF 0.99023 | GBPUSD 1.21508 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD              1.11590 | 1.11482

USDJPY                108.648 | 108.501

GBPUSD              1.21691 | 1.2146

USDCHF               0.99115 | 0.98969

AUDUSD             0.68970 | 0.6863

USDCAD              1.31558 | 1.31351

NZDUSD              0.66185 | 0.65869

EURCHF               1.10593 | 1.10431

EURGBP              0.91807 | 0.91694

EURJPY                121.187 | 120.996

For Today

  • GBP: After yesterday a fairly disappointing session with the market slowly pushing towards the 1.2170 level before falling back and holding around the 1.2150 area through to the London session, Downside see’s light congestion around the sentimental values with particular strength on any push towards the 1.2100 level however strong stops are likely on any sudden push through the level and exposes the lows from 2017 below 1.2000 where buyers possibly lurk in size, topside offers limited through to the 1.2350 area with a push through possibly causing a short squeeze through the 1.2400 level however, from there the offers are again likely to appear and with the market struggling for liquidity any signal that the selling is over beware a bounce.
  • JPY: Very limited with the move into the Tokyo session dipping to its lows around the 108.50 level before rising a little to make the highs just short of the 108.65 level, the market dipped back to trade to the lows and then ranged quietly through to the London session holding around the 108.55 area. 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 are likely to reappear and increasing into the 109.00 level, a break above the 109.20 level is likely to run into congestion and stronger offers into the 109.35-60 level.
  • AUD: The Oz held quietly through into the Tokyo session dipping through to the low 0.6860’s after the release of the CPI data before rally strongly as the market took in the details and pushed to the 0.6890 dipping a little before pushing steadily through to move into the London session testing towards the 0.6900 level, downside bids cleared through to the 0.6860 area with congestion then appearing around the 0.6850 areas with stronger bids then appearing on a dip through to the 0.6830 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: As with the other pairs quiet with the move into the Tokyo session seeing the high just short of the 1.1160 level before dipping on light selling through to the 1.1150 area before holding quietly through to London around the 1.1155 areas. 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

JPY:

Japan’s contrarian retail investors ditch emerging currencies – BBG

Mr Yen Sakakibara sees currency moving slowly towards the 100 level – BBG

NZD:

NZ second quarter job ads fall 0.6% – BBG

BNZ now sees RBNZ cutting cash rate in August, November to 1% – BBG

CNY/HKD:

Crackdown coming: China gathers forces on Hong Kong border – Zero Hedge

USD/CNY:

Trump lashes out at China rip off as trade talks resume – BBG

Trump backpedals on China threats as trade deal shows signs of slipping away – WP

China-US trade talks: If Washington still holds the illusion that Beijing will somehow cave in and compromise on issues concerning sovereignty and other related interests to reach a deal, then no deal is fine – Global times

GBP:

We are nowhere near a sterling crisis yet, but foreign funding is fickle – Telegraph

Steve Barclay MP: Two new Brexit committees are now up and running, I came away confident, we now have a fresh approach to negotiating a deal and are well prepared to leave the EU – TWT

Brexit no matter what – PM Boris Johnson promises – RTRs

EUR/USD:

Undeclared currency war: How the ECB is forcing the Fed’s hand – WSJ

CNY:

Rising S. China sea tensions cast shadow over Asean summit – BBG

Sickly China mills are another negative for Iron ore – BBG

KRW:

  1. Korea fired multiple unidentified projectiles – Yonhap

 

Today’s Data

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

GBP        GfK Consumer Confidence (JUL) A -11 | C -13 | P -13

JPY         Loans & Discounts Corp (YoY) (JUN) A 2.73% | P 3.24%

NZD       ANZ Activity Outlook (JUL) A 5 | P 8

NZD       ANZ Business Confidence (JUL) A -44.3 | P -38.1

CNY        Composite PMI (JUL) A 53.1 | P 53

CNY        Manufacturing PMI (JUL) A 49.7 | C 49.6 | P 49.4

CNY        Non-manufacturing PMI (JUL) A 53.7 | C 54.0 | P 54.2

AUD       Consumer Prices Index (QoQ) (2Q) A 0.6% | C 0.5% | P 0.0%

AUD       Consumer Prices Index (YoY) (2Q) A 1.6% | C 1.5% | P 1.3%

AUD       Consumer Prices Index RBA Trimmed Mean (QoQ) (2Q) A 0.3% | C 0.4% | P 0.3%

AUD       Consumer Prices Index RBA Trimmed Mean (YoY) (2Q) A 1.6% | C 1.5% | P 1.6%

AUD       Consumer Prices Index RBA Weighted Median (QoQ) (2Q) A 0.4% | C 0.4% | P 0.1%

AUD       Consumer Prices Index RBA Weighted Median (YoY) (2Q) A 1.2% | C 1.2% | P 1.4%

AUD       Private Sector Credit (YoY) (JUN) A 3.3% | C 3.5% | P 3.6%

JPY         Housing Starts (YoY) (JUN) A 0.3% | C -2.2% | P -8.7%

JPY         Construction Orders (YoY) (JUN) A -4.2% | P -16.9%

JPY         Consumer Confidence Index (JUL) A 37.8 | C 38.5 | P 38.7

05:30     CHF        Swiss National Bank Releases 2Q 2019 Currency Allocation

06:00     EUR        German Retail Sales (MoM) (JUN) C 0.5% | P -0.6%

06:00     EUR        German Retail Sales (YoY) (JUN) C 0.6% | P 4.0%

06:00     GBP        Nationwide House Px n.s.a. (YoY) (JUL) C 0.1% | P 0.5%

07:55     EUR        German Unemployment Change (000’s) (JUL) C 2.0k | P -1.0k

07:55     EUR        German Unemployment Claims Rate s.a. (JUL) C 5.0% | P 5.0%

09:00     EUR        Euro-Zone Unemployment Rate (JUN) C 7.5% | P 7.5%

09:00     EUR        Euro-Zone Gross Domestic Product s.a. (QoQ) (2Q A) C 0.2% | P 0.4%

09:00     EUR        Euro-Zone Gross Domestic Product s.a. (YoY) (2Q A) C 1.0% | P 1.2%

09:00     EUR        Euro-Zone Consumer Price Index Core (YoY) (JUL A) C 1.0% | P 1.1%

09:00     EUR        Euro-Zone Consumer Price Index Estimate (YoY) (JUL) C 1.1% | P 1.2%

10:00     EUR        Italian Gross Domestic Product w.d.a. (YoY) (2Q P) C -0.1% | P -0.1%

10:00     EUR        Italian Gross Domestic Product w.d.a. (QoQ) (2Q P) C -0.1% | P 0.1%

11:00     USD        MBA Mortgage Applications (JUL 26) P -1.9%

12:15     USD        ADP Employment Change (JUL) C 150k | P 102k

12:30     USD        Employment Cost Index (2Q) C 0.7% | P 0.7%

12:30     CAD       Gross Domestic Product (MoM) (MAY) C 0.1% | P 0.3%

12:30     CAD       Gross Domestic Product (YoY) (MAY) C 1.3% | P 1.5%

13:45     USD        Chicago Purchasing Manager (JUL) C 51.5 | P 49.7

14:30     USD        DOE U.S. Crude Oil Inventories (JUL 26) P -10835k

14:30     USD        DOE U.S. Gasoline Inventories (JUL 26) P -226k

18:30     USD        Fed Chair Powell Holds Press Conference After FOMC Meeting

22:30     AUD       AiG Performance of Manufacturing Index (JUL) P 49.4

 

Harry Hindsight

 

  • GBP: Moving steadily through into the Tokyo session the market posted its highs around the 1.2225 level and then strong selling in GBPJPY emerged triggering stops along the way and once the 1.2200 level broke the knock on effect in other pairs triggered a quick move to the 1.2160 level, the market held on to the levels for a reasonable period before breaking again with strong EURGBP buying this time triggering a quick run though to test just below the 1.2120 level and the selling eventually held pushing back to the 1.2150 level for the move into the London session, while the main stream media are calling it a Brexit move the movement would suggest something different with the large rise in EURGBP likely to be the main cause and Vodafone/Liberty Global merger behind that, the market stabilized through the bulk of the session with the range holding for the most part around the 1.2150b level with early London pushing the market to the 1.2190 level before drifting through into the NYK session with the range tightening down to the close.
  • JPY: USDJPY pushed from the opening around the 108.80 to make an early test through the 108.90 levels before starting a steady push lower and with a weaker GBP the GBPJPY pairing fell through technical levels triggering weak stops and the market pushed through to the London session testing to around the 108.60 level and drifting further through to the 108.45 level for the move into the NYK session where a light recovery saw the market pushing to the 108.70 levels before drifting to a close.
  • AUD: Very quiet Oz through the Asian session with the market holding around the opening levels and seeing minor dips through the 69 cents level before pushing lightly towards the 0.6910 to set the high for the day, it wasn’t really until deep into London that the market started to drift lower moving through to the NYK session pushing the supportive 0.6880 level before breaking through triggering weak stops and holding the 0.6870 level through to the close ranging tightly around the 0.6875 areas.
  • EUR: Opening around the 1.1145 level the market moved through into the Tokyo session and dragged a little lower as the Cable dipped and testing through the 1.1135 level before running through to the opening levels again contrary to the general movement unless someone was buying Euro’s, the move through to the grey hour and into early London saw the market probing the 1.1130 level and the low for the day before rallying on poor numbers to the 1.1150 level, the move into the NYK session saw further buying before a slow drift through to the 1.1140 level again for the move through the NYK option cut however, once past that point the market again rallied steadily through to the 1.1160 areas before settling in to a tight range through to the close.

 

Yesterday’s Premiership results

NZD       Building Permits (MoM) (JUN) A -3.9% | P 13.2%

JPY         Jobless Rate (JUN) A 2.3% | C 2.4% | P 2.4%

JPY         Industrial Production (YoY) (JUN P) A -4.1 | C -2.0% | P -2.1%

JPY         BOJ Rate Decision (JUL 30) A -0.10% | C -0.10% | P -0.10%

JPY         BOJ Outlook Report

JPY         BOJ 10-Yr Yield Target (JUL 30) A 0.00% | C 0.00% | P 0.00%

AUD       Building Approvals (YoY) (JUN) A -25.6% | C -24.3% | P -19.6%

EUR        French Gross Domestic Product (QoQ) (2Q P) A 0.2% | C 0.3% | P 0.3%

EUR        French Gross Domestic Product (YoY) (2Q P) A 1.3% | C 1.3% | P 1.2%

EUR        German GfK Consumer Confidence (AUG) A 9.7 | C 9.7 | P 9.8

CHF        KOF Leading Indicator (JUL) A 97.1 | C 93.3 | P 93.6 | R 93.8

EUR        Euro-Zone Economic Confidence (JUL) A 102.7 | C 102.7 | P 103.3

EUR        Euro-Zone Business Climate Indicator (JUL) A -0.12 | C 0.1 | P 0.17

EUR        Euro-Zone Industrial Confidence (JUL) A -7.4 | C -6.7 | P -5.6

EUR        Euro-Zone Services Confidence (JUL) A 10.6 | C 10.7 | P 11.0

EUR        Euro-Zone Consumer Confidence (JUL F) A -6.6 | C -6.6 | P -6.6

EUR        German Consumer Price Index (MoM) (JUL P) A 0.5% | C 0.3% | P 0.3%

EUR        German Consumer Price Index (YoY) (JUL P) A 1.7% | C 1.5% | P 1.6%

USD        Personal Income (JUN) A 0.4% | C 0.3% | P 0.5% | R 0.4%

USD        Personal Spending (JUN) A 0.3% | C 0.3% | P 0.4% | R 0.5%

USD        Real Personal Spending (JUN) A 0.2% | C 0.2% | P 0.2% | R 0.3%

USD        PCE Core (MoM) (JUN) A 0.2% | C 0.2% | P 0.2%

USD        PCE Core (YoY) (JUN) A 1.6% | C 1.7% | P 1.6% | R 1.5%

USD        S&P CoreLogic CS 20-City (MoM) SA (MAY) A 0.1% | C 0.2% | P 0.0% | R 0.0%

USD        S&P/Case-Shiller Composite-20 (YoY) (MAY) A 2.39% | C 2.4% | P 2.54% | R 2.53%

USD        S&P/Case-Shiller US Home Price Index (YoY) (MAY) A 3.43% | P 3.54% | R 3.52%

USD        Pending Home Sales (YoY) (JUN) A -0.6% | P -0.8%

USD        Consumer Confidence Index (JUL) A 135.7 | C 125.0 | P 121.5

USD        Conf. Board Present Situation (JUL) A 170.9 | P 162.6

 

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