Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 106.885 | EURUSD 1.11774| AUDUSD 0.6835 | NZDUSD 0.64087 | USDCAD 1.36078 | USDCHF 0.95231 | GBPUSD 1.23491 |

 

LMAX Highs and Lows 0500 GMT

Highs | Lows  

EURUSD               1.11973 | 1.11688

USDJPY                106.945 | 106.758

GBPUSD               1.23788 | 1.23352

USDCHF               0.95268 | 0.95134

AUDUSD              0.68628 | 0.68115

NZDUSD               0.64274 | 0.63838

USDCAD               1.36308 | 1.35856

EURCHF               1.06561 | 1.06402

EURGBP               0.90601 | 0.9044

EURJPY                119.705 | 119.316

 

For Today

 

  • GBP: A slow range lower from the opening around the 1.2355 area to test through to the 1.2335 lows before moving deeper into the Tokyo session to push a little quicker through to the 1.2370 level to range around the level to push steadily towards the 1.2380 through to the grey hour, congestion increasing on any move through the 1.2350 level to test towards the 1.2300 level and possibly strong bids through the level before limited bids through to the 1.2250 area. Topside offers light back through the 1.2400 level with some limited congestion around the 1.2450 level increasing to stronger offers into the 1.2500 levels with weak stops appearing behind the level.
  • JPY: Early lows as pre Tokyo tested the 106.75 level snapping back and above the 106.85 level before ranging around the 106.85 level through deep into the Tokyo session before pushing for the 106.95 level, it tailed but then spend the balance of the session around the 106.90 area, Downside bids into the 106.50 level with likely weakness through the level limited and stronger bids appearing from the 106.20 area through to 105.80, 105.50 has primarily been a tough level in the dips in 2018 and 2019 so strong congestion likely to appear and continue through to the 104.80 levels. Topside offers increasing through the 107.80 area and likely to continue through to the 108.10-20 area before weak stops appear and limited offers through to the 108.50 area where steady offers are likely to appear through to the 109.00 levels.
  • AUD: Increasing concerns of the building debt against the exports to China saw the Oz opening lower around the 0.6820 level ranging tightly into the Tokyo session pushing off the lows around the 0.6810 area to eventually start a slow rise through the Tokyo session to push through to the 0.6865 area before finding weak offers for the move into the grey hour, Topside offers likely to be light through the 0.7000 area and stiffen on any move through to the 0.7050-0.7100 area, once through the 0.7120 area the possibility of a small squeeze however, Downside bids light through to the 0.6800 area and continuing on any push through to the 0.6780 level is likely to see stronger stops appearing and the downside opening to a deeper move. With limited bids through to the 0.6700-0.6680 before stronger bids appear.
  • EUR: Opening a touch higher around the 1.1190 level only to lose the move through to the 1.1170 level and the low for the session and a steady rise through from early Tokyo to hold above the 1.1190 level with a weak test towards the 1.1200 level but generally holding through to the grey hour, Topside offers light through the 1.1250 level and then increasing in size as the market moves towards the 1.1280-1.1300 level area with weak stops on a move through the 1.1320 area to opening a quick move through the 1.1350 level. Downside bids into the 1.1150 level and likely to increase through to the 1.1100 area and weak stops likely for the move through the 1.1080 level and fairly weak until closer to the 1.1000 area.

 

Overnight News

 

AUD:

Government debt could reach $1t due to coronavirus, Peter Costello warns

Australia feels pressure as more natural sources available – Global Times

CNY:

Two more areas in Beijing raise COVID-19 alert level to high risk – Global Times

CHF:

SNB’s Furious crises response is happening behind the scenes – BBG

EUR:

ECB: Other major Cbanks to reduce frequency of 7-day USD operations – BBG

ECB Bond dispute could be resolved, new German Judge tells FAS – BBG

USD/CNY:

Trump held off Xinjiang sanctions for China trade deal – Axios

GBP:

UK PM Johnson to announce latest lockdown easing plans

NZD:

NZ Shadow board favours further QE negative OCR

 

Today’s Data

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

AUD       RBA Governor Lowe speaks

CNY       PBoC Loan Prime Rate A | P 3.85%

1000      GBP        CBI Industrial Trends Orders (JUN) A | P -62

1400      USD       Existing Home Sales (MAY) A | C 4.10m | P 4.33m

1400      USD       Existing Home Sales MoM (MAY) A | C -3.0% | P -17.8%

 

Harry Hindsight

 

  • GBP: Initial weakness through early Asia was reversed in a steady rise through to the London session, opening just above the 1.2420 rising a little through into Tokyo before dipping through to the 1.2405 level to make the early lows however, the market was there for only a short time before starting a slow steady rise through to the grey hour pushing into the London opening testing the 1.2455 area for the high of the day, London were steady sellers pushing into early London testing and holding in a tight range around the 1.2410 area, mid-morning saw the GBP dropping steadily back on stronger retail sales as the high streets slowly open but while better than expected doing really nothing but balance the adjustments for last month, running lower through to the NYK opening and a bit of a bounce from the 1.2365 level back above 1.2400 level before moving steadily lower in a long drawn out drift to the close after testing into the mid 1.2340’s.
  • JPY: A limited range for the USDJPY through the day, opening around the 107.00 initially pushing through to the 107.05 before running lower through 106.80 area into the grey hour before lifting back to the opening level to range through most of London morning before dipping through to test lightly below the 106.80 level and then holding quietly rising quickly and then drop back from the 107.05 straight back to the lows and a steady run through to the close holding just below the 106.90 level.
  • AUD: Peaking late in the day after a very quiet run through to the NYK session, opening around the 0.6850 area and slowly pushed through to the 0.6860 level in early Tokyo, before drifting through to the 0.6840 level for the range through Asia an into early London, the market increased its range testing to the 0.6875 level and back to the 0.6850 area before starting a stronger run for the move into NYK to gradually test above the 0.6910 areas, fail the level and a long drop over the next couple of hours to test to the low of the day around the 0.6830 area ranging through to the close in the 0.6830-50 area and finishing just off the low.
  • EUR: Euro ranged from the opening around the 1.1205 and the market remain limited moving into the Tokyo session testing above the 1.1210 level and testing the 1.1200 a few times, as the market ran through to the grey hour the market pushed through to the 1.1220 level and midsession in London dipping through to test the 1.1200 level again before running quickly higher into the NYK opening testing above the 1.1250 level and then drifting through to the 1.1230 to hit weak stops and dropping quickly back through to the 1.1170, bouncing and then gradually easing ever closer to those lows to finish the day around the 1.1180 area.

 

Yesterday’s Premiership Results

JPY         National Core CPI YoY (MAY) A -0.2% | C -0.1% | P -0.2%

JPY         Monetary Policy Meeting Minutes

AUD       Retail Sales MoM A 16.3% | P -17.7%

GBP        Core Retail Sales MoM (MAY) A 10.2% | C 4.5% | P -15.2% | R 15.0% | R -18.5%

GBP        Core Retail Sales YoY (MAY) A -9.8 % | C -14.4% | P -18.4%

GBP        Retail Sales MoM (MAY) A 12.0% | C 5.7% | P -18.1% | R -18.0

GBP        Retail Sales YoY (MAY) A -13.1% | C -17.1% | P -22.6% | R -22.7%

EUR       German PPI MoM (MAY) A -0.4% | C -0.3% | P -0.7%

USD       Current Account (Q1) A -104.2b | C -103.0b | P -109.8b | R -104.3b

CAD       Core Retail Sales MoM (APR) A -22.0% | C -13.5% | P -0.4% | R -0.2%

CAD       Retail Sales MoM (APR) A -26.4% | C -15.1% | P -10.0%

USD       FOMC Member Rosengren Speaks

USD       FOMC Member Quartles Speaks

USD       US Baker Hughes Total Oil Rig Count A 266 | P 279

USD       FED Chair Powell Speaks

USD       FOMC Member Mester Speaks

 

Best Regards

Andy

 

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