Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good Morning,

LMAX Close
USDJPY 109.829 | EURUSD 1.09987 | AUDUSD 0.67466 | NZDUSD 0.64716 | USDCAD 1.32814 | USDCHF 0.97347 | GBPUSD 1.30012

LMAX highs and Lows 06.00 GMT
Highs | Lows
EURUSD 1.10008 | 1.09943
USDJPY 109.981 | 109.748
GBPUSD 1.30047 | 1.2973
USDCHF 0.97450 | 0.97338
AUDUSD 0.67650 | 0.67438
USDCAD 1.32868 | 1.32812
NZDUSD 0.64828 | 0.64692
EURCHF 1.07160 | 1.0710
EURGBP 0.84752 | 0.84599
EURJPY 120.937 | 120.754

For Today
• GBP: A steady drift through the Asian session from the opening just above the 1.3000 level holding into the last hour around the 1.2985 area before dipping through to the low 1.2970 level before returning to the 1.2980 for the move into the grey hours, Downside bids through the 1.2980 level and increasing into the 1.2950 area before light congestive bids start to appear and likely to increase the closer the market moves towards the 1.2900 area with strong stops suspected below the level, topside offers light through to the 1.3050 with possibly minor congestion through the 1.3050 area and continuing into the same vein through to the 1.3100 areas, from there the market is likely to remain weak with very limited resistance to a good push and only as the market pushes through the 1.3150 level do the offers start to increase into the 1.3200 area.
• JPY: USDJPY saw a slow grind higher from the opening 109.80 level to test towards the 110.00 late into the session before heading out into the grey hours holding around the 109.95 area and the highs of the day, Topside offers likely to be limited with weak stops on a push through the 110.20 area and opening up limited room through to the 110.50 and increasing resistance as the market approaches the 111.00 areas, downside bids light through to the 109.00 area with limited support and weak stops likely to be light for a move back to the stronger 108.50 area with good support likely to appear on any dips to the 108.00 levels.
• AUD: Choppy but limited range with the market lifting off the low opening around the 0.6745 area and testing steadily through to the 0.6760 areas in a sustained push before dipping and rising down to the opening levels again, the move into the Tokyo Lunch hour saw the market back to the 0.6760’s with a spike to the 0.6765 to make the high before holding through into the grey hours just off those highs. , downside bids cleared through to the 0.6680 level opening up a deeper move over a long period with bids likely to appear around the sentimental 00/50 areas, topside offers light through to the 0.6780 level with strong offers likely to increase into the 0.6800/20 area with weak stops appearing through the level and 0.6840-60 likely to be stronger.
• EUR: Euro’s opened around the 1.1000 level but once into the Tokyo session spent the day holding tightly around the 1.0995 area as the option barriers hold for the time being, downside stops likely on a push through the 1.0980 area and then a little bit of a scramble possible to push the market into the 1.0940-60 areas and probably sufficient congestion around the sentimental level to hold however, failing that the market is likely to see stronger bids appearing on the approach through to the 1.0900 level where any weakness will likely see a deeper move. Topside offers light through to the 1.1040 area with limited congestion then appearing through to the 1.1070 level where stronger offers are suspected.

Overnight News
CNY:
920 Soldiers quarantined over new Coronavirus defence ministry said – YNA
China deaths reach above 600 – BBG
China’s Coronavirus is not remotely under control and the world economy is in mounting peril – TEL
WHO says Coronavirus cases surge: most cases in a single day
CNY/USD:
China to halve added tariffs on $75b of US goods from Feb 14 – RTRs
SGD:
Prolonged China factory closures to weigh on Singapore firms – BTM
AUD:
RBA: Governments need to borrow more, rate cuts sill on agenda – SMH
USD:
Impeachment over Trump found innocent, wait for the next one

Today’s Data
Actual – A | Consensus – C | Previous – P | Revised R | all timings GMT/UTC
AUD NAB Business Confidence (4Q) A -1 | P -2
AUD Retail Sales Ex Inflation QoQ (4Q) A 0.5% | C 0.3% | P -0.1%
AUD Trade Balance (DEC) A 5223m | C 5600m | P 5800m
0700 CHF UBS Real Estate Bubble Index (4Q) P 0.93
0700 EUR German Factory Orders n.s.a. YoY (DEC) C -6.6% | P -6.5%]
0800 EUR ECB President Lagarde Speaks in Brussels
0830 EUR Markit Germany Construction PMI (JAN) P 53.8
0900 EUR ECB Publishes Economic bulletin
1330 USD Continuing Claims (JAN 25) P 1703k
1330 USD Initial Jobless Claims (FEB 1) C 215k | P 216k
2130 AUD AiG Performance of Service Index (JAN) P 48.7
2230 AUD RBA’s Lowe Semi-annual Testimony to Parliament Committee
2330 JPY Labour Cash Earnings YoY (DEC) C -0.2% | P -0.2%
2330 JPY Overall Household Spending YoY (DEC) C -1.6% | P -2.0%
2330 JPY Real Cash Earnings YoY (DEC) C -0.9% | P -0.9%

Harry Hindsight

• GBP: Asian trading saw the market drifting from the opening around the 1.3030 level with an early spike higher, the run into the Tokyo session remained quiet before slow selling appeared and the market ran to the midsession testing through the 1.3015 areas before making a limited recovery for the run to the grey hours drifting through into the 1.3010 area before London took the market quickly through to the 1.3050 level, holding for a short period the market eventually pushed to its highs testing the 1.3070 level before holding quietly through to the NYK session around the 1.3050 areas, Employment numbers and a better than expected ISM number saw the market dropping quickly as USD buyers appeared and the market tested initially to the 1.3000 level before dipping through and turning to the 1.2955 level and starting to become a strong support area, the market moved easily off the level and trading through the 1.3000 level eventually and holding in a 20 pip range through to the close just above the level.
• JPY: Q quiet session for USDJPY with a steady drift lower through the early part of the session to base around the 109.40 level through to the grey hours having opened around the 109.50 areas, the move into the grey hours saw another dip lower and testing to the 109.30 level for the move into the London session and the buyers then appeared and quickly took the market back to the 109.70 area from the day before, holding quietly through into the NYK session and after a minor dip pushed steadily through to the 109.80 level and remained through to the close.
• AUD: Dipping from the opening the market traded through to the 0.6725 area before Lowe’s commentary saw the market sharply rising to the 0.6745 level before holding steady through to the London session, quick buyers saw the market rising through to the 0.6770 level before drifting back a little for the move into the NYK session, a slight rise through the early part of the NYK session saw the highs threatened again but the US figures saw the run finish and the market drop back to hold quietly in the 0.6740 levels through to the close.
• EUR: A steady drift through the early part of the Asian session holding the 1.1035 level through into the London session, London were slight buyers to make the days high just below the 1.1050 area before selling moved in and the market steadily dropped into the 1.1000 level for the move into the NYK session holding around the level until after the London session closed the market made a single dip into the low 1.0990 areas before the support pushed it back to run to the close just short of the figure level.

Yesterday’s Premiership results
AUD AiG Performance of Construction Index A 41.3 | P 38.9
NZD Employment Change YoY (4Q) A 1.0% | C 1.2% | P 0.9%
NZD Unemployment Rate (4Q) A 4.0% | C 4.2% | P 4.2%
NZD Employment Change QoQ (4Q) A 0.0% | C 0.3% | P 0.2%
AUD RBA Governor Lowe gives Speech in Sydney
CNY Caixin PMI Composite (JAN) A 51.9 | P 52.6
CNY Caixin PMI Services (JAN) A 51.8 | C 52 | P 52.5
CHF SECO Consumer Confidence (1Q) A -7.0 | C -8.0 | P -10.4
EUR Eurozone Retail Sales YoY (DEC) A 1.3% | C 2.3% | P 2.2% | R 2.3%
USD MBA Mortgage Applications A 5.0% | P 7.2%
EUR ECB President Legarde Speaks in Paris
USD ADP Employment Change (JAN) A 291k | C 160k | P 202k
USD Trade Balance (DEC) A -48.9b | C 47.8b | -P 43.1b | R -43.7b
USD ISM Non-Manufacturing/Services Composite (JAN) A 55.5 | C 55.1 | P 55.0
USD DOE US Crude Oil Inventories (JAN 31) A 3355k | C 2876k | P 3548k

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