Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close

USDJPY 107.341 | EURUSD 1.10852 | AUDUSD 0.68014 | NZDUSD 0.65538 | USDCAD 1.32116 | USDCHF 0.99037 | GBPUSD 1.21314 |

LMAX highs and Lows 05.00 GMT

                                Highs | Lows

EURUSD              1.10969 | 1.1070

USDJPY                107.562 | 106.851

GBPUSD              1.21452 | 1.20907

USDCHF               0.99098 | 0.98764

AUDUSD             0.68183 | 0.67954

USDCAD              1.32262 | 1.32109

NZDUSD              0.65610 | 0.65376

EURCHF               1.09800 | 1.09503

EURGBP              0.91683 | 0.91306

EURJPY                119.118 | 118.438

For Today

  • GBP: Nervous trading through the session moving off the 1.2115 area testing towards the 1.2150 area initially before steady GBPJPY selling moved through and the market pushed quickly through the 1.2100 level testing towards the 1.2090 level a light bounce before the market started drifting from the 1.2120 area through to hold the lows for the move into the London session, Downside bids into the 1.2085 area and an old trend line a break through the level will likely see weak stops appearing and the market opening to test the sentimental levels around the 1.2050 and 1.2000 where stronger bids could be a possibility, with strong stops below there and the market very vulnerable, Topside likely to be very weak with the market open to a short squeeze on any good news, not likely but its there, a push highs will see limited offers into the sentimental areas with stops likely through the 1.2200 area a particular concern.
  • JPY: Early buying saw the market rising through the 107.50 into the Tokyo session before again dropping from the Tokyo fix back through to test through the 107.00 level to the mid 106.80’s before finding some support and holding just above through to the London session around the figure level, Downside bids into the 106.80 area with stops likely on a move through the level however, congestion is likely to move into the market and possibly slow any further move for the day with bids around the 106.50 and increasing on any dip towards the 106.00-105.90 with a break opening further losses and weakening support through to the 105.00 levels. Topside offers through to the 107.80-108.00 level with congestion just above the level with congestion likely through to 109.00 starting to build.
  • AUD: Opening around the 68 cents level the market drifted lightly through the early part of the session before slowly moving through towards the 0.6820 area and then settling into a tight range around the 0.6810 level into the London session, Topside limited through the 0.6850 level with stronger offers likely to increase on any approach to the 0.6880-0.6900 areas with weak stops likely to appear on a move through the 0.6920 level, downside bids light through to the 0.6780 level slowly being chipped away before stops appear and the market open through to the 0.6740-60 areas and congestion appearing and strong bids likely on any dip towards the 0.6700 area.
  • EUR: Drifting from the opening around the 1.1080 level saw the market moving higher towards the 1.1100 level in early Tokyo holding quietly through to mid-session around the 1.1090 areas before dropping quickly back to make the lows around the 1.1070 areas and holding just above that level through to the London opening, Downside bids likely to be reasonably strong into the 1.1000 level with congestion around the level before lightening a little for a test to the 1.0950 areas. Topside offers light through to the 1.1100 level with weak stops likely just beyond the level and opening a stronger possible move through to the 1.1200 areas before resistance starts to increase.

 

Overnight News

GBP:

Suffocating UK factories report biggest fall in output in 7 years – Yahoo

Tory Majority cut to 1 after as expected in byelection in Wales – BBG

Moody’s: UK’s tax, spending promises may hurt credit profile

USD/CNY:

US to publish final $300b tariff target list in days – BBG

Trump ratchets up trade war with new China Tariffs – BBG

Trump: New 10% Tariff is for a short-term period

Trump: 10% Tariff can be raised beyond 25%

USD/EUR:

Trump to make announcement on EU trade 1245GMT Friday – BBG

AUD:

Australia’s finance sector faces more scrutiny from lawmakers – BBG

NZD:

NZ July consumer confidence fell 5.1% MoM ANZ says

 

Today’s Data

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

JPY         BOJ Minutes of June Policy Meeting (JUN)

JPY         Monetary Base (YoY) (JUL) A 4.0% | P 4.0%

JPY         Monetary Base End of period (JUL) A ¥518.1t | P ¥523.2t

AUD       Retail Sales Ex Inflation (QoQ) (2Q) A 0.2% | C 0.3% | P -0.1%

06:30     CHF        Consumer Price Index (MoM) (JUL) C -0.4% | P 0.0%

06:30     CHF        Consumer Price Index (YoY) (JUL) C 0.5% | P 0.6%

06:30     CHF        CPI EU Harmonized (YoY) (JUL) C 0.5% | P 0.7%

06:30     CHF        CPI Core (YoY) (JUL) C 0.6% | P 0.7%

07:30     CHF        PMI Manufacturing (JUL) C 47.5 | P 47.7

08:30     GBP        Markit/CIPS UK Construction PMI (JUL) C 46.0 | P 43.1

09:00     EUR        Euro-Zone Retail Sales (YoY) (JUN) C 1.3% | P 1.3%

12:30     USD        Change in Non-farm Payrolls (JUL) C 169k | P 224k

12:30     USD        Change in Private Payrolls (JUL) C 165k | P 191k

12:30     USD        Unemployment Rate (JUL) C 3.7% | P 3.7%

12:30     USD        Average Hourly Earnings (MoM) (JUL) C 0.2% | P 0.2%

12:30     USD        Average Hourly Earnings (YoY) (JUL) C 3.2% | P 3.1%

12:30     USD        Average Weekly Hours All Employees (JUL) C 34.4 | P 34.4

12:30     USD        Trade Balance (JUN) C -$54.6b | P -$55.5b

14:00     USD        Factory Orders (JUN) C 0.7% | P -0.7%

14:00     USD        Durable Goods Orders (JUN F) P 2.0%

14:00     USD        U. of Mich. Sentiment (JUL F) C 98.5 | P 98.4

 

Harry Hindsight

 

  • GBP: A quiet opening and move into the Tokyo session before quick Cable selling moved in to test the 1.2100 level, the market weakly bounced off the level and moved back to the 1.2135 level holding in the area to the grey hour before lightly drifting through in early trading before testing quickly through the 1.2100 level and bouncing off the 1.2085 areas and an old trend line, the market moved into the NYK session dipping for the second time and setting the low for the day just through the 1.2080 level before bouncing again and catching USD weakness and running through to the 1.2150 level and holding quietly through to the close making the high just beyond the 1.2170 area before drifting to the close.
  • JPY: Mr Yen seems have called it after all, Opening around the 108.80 level the Asian market took the USDJPY through the 109.00 level in early Tokyo and ran towards the 109.30 level before holding quietly through into the London session around the 109.20 levels, from London opening the market started to drift lower trading through to the NYK session pressing back through the 109.00 level and once in NYK the drift increased and with the ISM numbers in the US appearing strongly on the weak side the market dipped through to the 108.20 level before finding some support however, the support melted and a quick dip through to the 107.30 areas saw any pretence disappearing holding eventually for the final run to the close around the 107.25 areas.
  • AUD: The Oz bore the brunt of much of the JPY action late in the day however, the opening saw the market edge a little higher to push above the 0.6850 area before AUDJPY selling moved through the market for the first time, taking the Oz through to just above the 0.6825 level and an old trend line, the market bounced off the level and pushed again through the 0.6850 level and ranged around the level deep through the day slipping a little into early NYK before starting a rise through to the 0.6885 level and then the market collapsed with the USDJPY selling squeezing margins for those holding the limited carry trades and testing the 0.6800 level dipping a couple of times to the 0.6795 area before ranging to the close around the 68 cents level.
  • EUR: Opening around the 1.1080 level the market quietly moved into the Tokyo session dropping quickly through to the mid 1.1030’s before holding in a tight range through to the London session struggling to make it back through the 1.1050 level, early London saw the market drift through to slowly test the 1.1030 level through into the NYK session before starting a steady rally through the balance of the session after the poor ISM numbers in the US, pushing back to the 1.1070 level into the London close, a quiet couple of hours saw the market probing the 1.1070 level and eventually pushing through as JPY buyers moved into the market and the rally through to just below the 1.1100 level dipping for the close.

 

Yesterday’s Premiership results

AUD       AiG Performance of Manufacturing Index (JUL) A 51.3 | P 49.4

CNY        Caixin China PMI Mfg (JUL) A 49.9 | C 49.6 | P 49.4

GBP        Markit UK PMI Manufacturing s.a. (JUL) A 48 | C 47.7 | P 48.0

GBP        Bank of England Bank Rate (AUG 1) A 0.75% | C 0.75% | P 0.75%

GBP        Bank of England Inflation Report

GBP        BOE Asset Purchase Target (AUG) A 435b | C 435b | P 435b

USD        Challenger Job Cuts (YoY) (JUL) A 45.2% | P 12.8%

GBP        BOE’s Carney speaks at press conference in London

USD        Initial Jobless Claims (JUL 27) A 215k | C 212k | P 206k | P 207k

USD        Continuing Claims (JUL 20) A 1669k | P 1676k | R 1677k

CAD       RBC Canadian Manufacturing PMI (JUL) A 50.2 | P 49.2

USD        ISM Manufacturing (JUL) A 51.2 | C 52.0 | P 51.7

USD        ISM Employment (JUL) A 51.7 | P 54.5

USD        ISM Prices Paid (JUL) A 45.1 | C 49.0 | P 47.9

USD        Construction Spending (MoM) (JUN) A -1.3% | C 0.4% | P -0.8%

MXN      Markit Mexico PMI Mfg (JUL) A 49.8 | P 49.2

 

 

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