Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 106.922 | EURUSD 1.09788 | AUDUSD 0.67687 | NZDUSD 0.63157 | USDCAD 1.33086 | USDCHF 0.99544 | GBPUSD 1.23349 |

LMAX highs and Lows 05.00 GMT
Highs | Lows
EURUSD 1.09898 | 1.0976
USDJPY 106.854 | 106.66
GBPUSD 1.23363 | 1.23058
USDCHF 0.99589 | 0.99393
AUDUSD 0.67654 | 0.67478
USDCAD 1.33251 | 1.33047
NZDUSD 0.63213 | 0.63022
EURCHF 1.09347 | 1.09175
EURGBP 0.89114 | 0.89016
EURJPY 117.365 | 117.084
For Today
• GBP: Opening some 20 pips off the Friday close with the commentary from No’s 10 over the weekend causing the dip, the markets move into the Tokyo session saw the gap on the charts cleared and the market back to the 1.2335 level and holding around the 1.2330-35 level to deeper into the Tokyo session before drifting through to the 1.2325 areas for the move into the grey hour, Downside bids cleared a little through to the 1.2210 area with strong bids likely to remain in play before weak stops likely on a push through the 1.2200 areas and opening up a deep move through to the 1.2100 area before support is likely to reappear, topside offers cleared through to the 1.2340 areas with resistance through the sentimental 1.2350 areas with weakness likely to continue through to the 1.2380-1.2400 areas where stronger offers likely.
• JPY: Gap on the opening with the market opening around the 106.68 areas and testing a little lower to make the lows close to 106.65 area before rising into the Tokyo session however, the initial run through to the 106.85 area saw a lack of interest move deeper into the session and a slow drift back to the 106.70 level before running back to hold above the 106.80 area for the move into the grey hour, Topside offers light through the 107.00-20 areas and continuing with limited congestion to the 108.50 areas with limited resistance through the level but increasing on any move towards the 108.80-109.00 area with weak stops limited above the 109.20 areas. Downside bids into the 106.50 areas with strength likely to be in that area with congestion likely on any push through towards the 106.00 areas and possible stronger stops on a push through the 105.80 areas and a concern then for the BoJ.
• AUD: A weaker start for the weak saw the market opening around the 0.6760 level and then steadily pushing through to manage a gain of 5 pips before the market drifted back deep into the Tokyo session and light selling taking it through to the 0.6755 level before the move lower slowed to a steady drift through into the high 0.6740’s before holding around the 0.6750 into the grey hour, Downside bids through to the 0.6680-0.6700 level with weak stops likely on a dip through the 0.6670 level with congestive bids then likely to be patchy but centred around the sentimental 50/00 areas, topside offers light through to the 68 cents level before stronger selling is likely to appear even a push through the 0.6820 area and weak stops are likely to find sellers willing to move in on the moves.
• EUR: Almost unchanged from Friday the market saw slow but steady gains having touched through to the mid 1.0970’s in early trading and then testing to the 1.0990 level in a steady grind higher however, having reached the level there was very little indication of it testing any further before drifting back to the opening levels for the move into the grey hour, Topside offers likely to be weak on any move through to the 1.1000 areas with congestion around the 1.1020 level and weak stops just beyond the level and opening the market through to the 1.1040-60 areas where congestion is likely, stronger offers then appear on any push through the 1.1080-1.1100 levels. Downside bids through the yesterday’s lows and then increasing as the market moves towards the 1.0890-70 areas, with stops likely on any dip through the 1.0880 areas and opening a longer-term downside move with some congestion around the 1.0860-40 areas and then increasing on any move to the 1.0820-00 areas.

Overnight News
CNY/USD:
China narrows scope for trade deal with US ahead of talks – BBG
USD:
Attorneys for CIA officer behind Trump complaint say they now represent multiple whistle-blower’s – DJ
Fox news poll of Wisconsin shows Trump losing badly to Biden and Warren
Fed’s George: My outlook is for inflation to remain fairly benign – BBG
George: Cites outlook for continued moderate growth – BBG
George: Trade disputes, geopolitical risk fuelled dollar gains – BBG
George: Adjusting policy may be needed should data weaken – BBG
George: US economy in good place with low unemployment – BBG
George: Dissented last meeting as growth moderating to trend – BBG
George: Low import price gains to weigh on US inflation – BBG
GBP:
Johnson doubles down on Oct 31 No deal Divorce – BBG
Boris Johnson to seek supreme court ruling on No deal Brexit – TEL
Johnson ask Frances Macron to push forward on Brexit – RTRS
Johnson: Discussed his proposals with Macron and Portugal’s Costa on Sunday, will continue talks with EU leaders Monday no’s 10 spokesman
Johnson: Told Macron the EU should not be lured into mistaken belief that UK will stay in the EU after Oct 31 – Spokesman
Johnson: We have to push forward, this is final opportunity for a deal, but EU must match compromises Britain has made in recent weeks – Spokesman
Britain will consider publishing full legal text on proposal, if it is deemed helpful to progress talks but not before – Spokesman
IRR/CNY:
Iran says Chinese state oil firm withdraws from $5b deal – APW
NZD:
ANZ Bank forecasts NZD dropping to 11-year low by March – BBG
NZ Treasury didn’t compile September economic indicators report – BBG
CNY/HKD:
Chinese military warn Hong Kong protesters as they defy emergency law – SYH

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
AUD AiG performance of Construction Index A 42.6 | P 44.6
0200 NZD Treasury publishes Monthly Economic Indicators
0600 JPY Coincident Index (AUG P) C 99.4 | P 99.7
0600 JPY Leading Index C 91.7 | P 93.7
0700 EUR German Factory Orders YoY (AUG) C -6.6% | P -5.6%
USD Monthly Budget statement C $89.0B | P $119.1B
2000 USD Consumer Credit (AUG) C $15.00b | P $23.294b

Harry Hindsight

• GBP: Asian range was muted however, the high for the day saw the market rising through to mid Asian session pushing through to the 1.2355 areas before dipping back to the opening levels for the move into the grey hour, holding around the 1.2335 level, London did very little until it approached the NYK session with some minor gyration between the 1.2310-50 areas, the move into NYK saw the market dropping away from the 1.2350 level and dipping in a choppy manner through to the 1.2275 level before slowly rising to the 1.2300 areas again and slowly rising over the close in London to the 1.2330 level and struggling through to the close in a tight 1.2330-40 areas.
• JPY: Asia saw a slow drift through to the 106.75 area before holding for a couple of hours and rising back to the 106.80 areas for the move into the London session, the market again saw a steady drift pushing through to the 106.65 area before moving into the NYK session and dipping on the NFP number and rising quickly again on the weaker hourly earnings number to quickly move off the light breech of the 106.60 level and testing through the 107.00 level dipping only slightly and then rising to test through to the 107.15 area however, unable to get any further the market dipped back to the opening levels and traded around the 106.90 areas through to the close.
• AUD: A slow but steady rise through the day with the market opening just above the 0.6740 area and pushing through into the Tokyo session hardly moving before dropping quickly to make the low just before the 0.6740 area and returning to the steady rise through to the 0.6755 level and holding in a tight range through to the London session, the market returned to the steady rise and ranged slowly through to hit the 0.6765 areas on the move into the NYK and the contrary numbers saw the same sort of movement with the AUD dipping to the 0.6745 area and then rising quickly to push through the 0.6765 areas, as the market settled back down the market renewed its steady rise and pushed through to the London close just below the 0.6770 areas before pushing through and posting highs just short of the 0.6775 level before drifting to the close.
• EUR: Apart from the NYK numbers the market held quietly through the day rising from the opening around the 1.0970 areas and push on a steady climb to around the 1.0985 areas before drifting back for the move into the London session to hold quietly around the level before rising steadily through to the 1.0990 area, the move into the NYK session saw a slight dip back into the 1.0970’s before the numbers release with a quick stab higher failing just short of the 1.1000 level and then testing through to the lows around the 1.0960 area before steadily rising through to the close ranging around the 1.0980 areas.

Yesterday’s Premiership results
EUR Markit Germany Construction PMI (SEP) A 50.1 | P 46.3
USD Change in Non-Farm Payrolls (SEP) A 136k | C 145k | P 130K
USD Unemployment Rate (SEP) A 3.5% | C 3.7% | P 3.7%
USD Average Hourly Earnings YoY (SEP) A 2.9% | C 3.2% | P 3.2%
USD Average weekly Hours all employees (SEP) A 34.4 | C 34.4 | P 34.4
USD Change in Private Payrolls (SEP) A 114k | C 130k | P 98k
USD Trade Balance (AUG) A -54.9b | C $54.5b | P 54.0b
USD Baker Hughes US Rig Count A 855 | C 851 | P 860
USD Powell Makes Opening remarks at Fed Listens event

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