Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 106.907 | EURUSD 1.1261 | AUDUSD 0.69082 | NZDUSD 0.64857 | USDCAD 1.35231 | USDCHF 0.95764 | GBPUSD 1.2469 |

 

LMAX Highs and Lows 0500 GMT

Highs | Lows  

EURUSD               1.12809 | 1.12335

USDJPY                107.221 | 106.739

GBPUSD               1.25071 | 1.14365

USDCHF               0.94896 | 0.94677

AUDUSD              0.69343 | 0.68609

NZDUSD               0.64975 | 0.64376

USDCAD               1.35699 | 1.35017

EURCHF               1.06808 | 1.0662

EURGBP               0.90364 | 0.90196

EURJPY                120.857 | 119.923

 

For Today

 

  • GBP: Rising from the opening around the 1.2465 level the market quickly pushed on the Tokyo opening to the 1.2695 level and through into the first hour pushing beyond the 1.2500 level to peak just above the 1.2505 area, that is before Navarro started talking, eventually stopping and then starting again to take everything back, or most of it. The consequences of which risk was on, off, and then on again, dropping from above the 1.2500 level back through to trade to the 1.2440 level before pausing and bouncing to above the 1.2490 before calming down to range around the 1.2470 level and lots of disgruntled longs, shorts chewed up and spat out thanks to Peter Navarro. Topside offers through the 1.2500 a little lighter than they were and weak stops possibly clear out after today’s movement, stronger congestion likely on a move to the 1.2550 area with weaker offers through the level on a push for the 1.2600 level before congestion reappears around the 1.2630 level, downside bids light through to the 1.2400 level and possible weak stops on a dip through the level before increasing bids into the 1.2350 areas, congestion on any move through the level to the 1.2300 areas before opening the downside 1.2250 area for a test and possibly the key level for the short term.
  • JPY: A quiet range through the pre-Tokyo period holding around the 106.90 level and eventually easing above the area but unable to make any move on the 107.00 level that is until Navarro, a quick dip through to the 106.74 area then bouncing quickly on a short squeeze through to the 107.20 areas with limited push above and holding for the move through to the grey hour, 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: Moving slightly high from the opening around the 0.6910 areas pushing through to the 0.6935 area into the Tokyo session before dropping back to the 0.6860 areas as the Navarro sent the USD lower however, this caused AUDJPY selling as the cross tried to balance with USDJPY selling and forced the AUD leg lower only for the Oz to recover rising from the lows back to the 0.6930 before drifting after the quick move. 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: As with the other major pairings mentioned initially risk on and risk off, only to return to its previous levels once the narrative changed, opening around the 1.1260 level the market pushed steadily into the Tokyo session pushing lightly through the 1.1280 level before quickly dipping through to the 1.1235 area before bouncing back to the 1.1270 area after a brief pause at the bottom to hold quietly around the level to the grey hour, Topside offers 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

 

EUR/CNY/HKD:

EU warns China of very negative consequences to Hong Kong Security law – Times Now

USD/CNY:

Navarro tells WSJ comment of China trade taken wildly out of context – WSJ

Navarro prompted risk aversion will enter more nuance phase BBG

White House adviser Navarro says China trade deal is over – TWT

CNY:

China in recession and heading for full year decline – Beige Book

USD:

US puts restrictions on four more Chinese state media outlets – RTRs

CHF:

SNB against raising Swiss government payments to cover COVID-19 fallout – RTRs

SNB’s Zurbruegg: Monetary policy cannot cushion economic effect of coronavirus – RTR’s

Zurbrueeg: SNB increasing pay-out to national, local Governments – RTR’s

 

Today’s Data

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

JPY         Services PMI A 42.3 | P 26.5

0730      EUR       German Manufacturing PMI (JUN) A | C 41.5 | P 36.6

0730      EUR       German Services PMI (JUN) A | C 42 | P 32.6

0800      EUR       Eurozone Manufacturing PMI (JUN) A | 44.5 | P 39.4

0800      EUR       Eurozone Composite PMI (JUN) A | 42.4 | P 31.9

0800      EUR       Eurozone Services PMI (JUN) A | C 41 | P 30.5

0830      GBP        Composite PMI  A | P 30

0830      GBP        Manufacturing PMI A | P 40.7

0830      GBP        Services PMI A | P 29.0

0845      GBP        BoE Gov. Bailey Speaks

1345      USD       Manufacturing PMI (JUN) A | C 48 | P 39.8

1345      USD       Markit Composite PMI (JUN) A | P 37.0

1345      USD       Services PMI (JUN) A | C 48.5 | P 37.5

1400      USD       New Home Sales A | C 648k | P 623k

1400      USD       New Home Sales A | C 3.5% | P 0.6%

2030      USD       API Weekly Crude Oil Stock A | P 3.9m

 

Harry Hindsight

 

  • GBP: After a slow opening with the Cable drifting from the opening around the 1.2350 level the market slipped through to move into the Tokyo session testing the 1.2335 level before finding some buyers and a quick test through to the 1.2365 level for a quiet few hours to test through to the 1.2375 level and increasing in movement through into the grey hour pushing the 1.2400 level, early Europeans sold the market back to the 1.2365 area before starting a steady rise through the 1.2400 level to test to the 1.2435, the move through to the NYK session saw the market losing ground again to test through to the 1.2380 level before ranging around the 1.2400 level, early NYK held quietly for the first couple of hours before buying steadily through to the 1.2450 level with the market holding in the area with light congestion holding it in place before slowly rising through to the 1.2475 area before dipping only a little for the move to the close.
  • JPY: A fairly quiet day for the USDJPY with much of the session ranging around the 106.90 areas with early lows just after the opening into the 106.77 area before steadily rising through to the 106.90 level testing through to the 106.95 area before heading into the grey hour to push through into London testing marginally above the figure level before drifting back to the 106.90 area to range again through to the NYK opening, light selling from the opening saw the market testing back to the 106.80 again and after a brief period returned to the 106.90 areas to range through to the close.
  • AUD: Opening lower the market traded from the 0.6815 level through into the Tokyo session rising through to the 0.6825 area and after an hour or so into the session the Oz pushed through to fill the gap on the charts and after a brief pause the market pushed through to the 0.6875 level to pause through into the grey hour and dip slightly for the opening in London, very quiet through the session in London and only saw the market rising again as the market moved through to the NYK session and then it was steady buying through to the 0.6915 level pausing and dipping through to the 0.6920 and ranging just above the figure level through to the close.
  • EUR: Opening a little higher and just off the lows of the day dipping through into the Tokyo opening to the 1.1170 level before starting a steady climb back to the opening 1.1185 level and continuing steadily through to the 1.1200 level for the move into the grey hour and the London opening initially ranging around the figure before rising through to the 1.1225 level for the first time, the move into the NYK session saw the market dipping towards the 1.1200 area and then steadily rising again to trigger weak stops to the 1.1250 level and ranging through to the close struggling with the 1.1265 area for the most part.

 

Yesterday’s Premiership Results

AUD       RBA Governor Lowe speaks

CNY       PBoC Loan Prime Rate A 3.85% | P 3.85%

GBP        CBI Industrial Trends Orders (JUN) A -58 | P -62

USD       Existing Home Sales (MAY) A 3.91m | C 4.10m | P 4.33m

USD       Existing Home Sales MoM (MAY) A -9.7% | C -3.0% | P -17.8%

 

Best Regards

Andy

 

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