Daily FX Market Commentary

Andy Harrison

Andy Harrison

Good morning,

 

LMAX Close

USDJPY 107.222 | EURUSD 1.12191 | AUDUSD 0.68643 | NZDUSD 0.6422 | USDCAD 1.36863 | USDCHF 0.94819 | GBPUSD 1.23362 |

 

LMAX Highs and Lows 0500 GMT

Highs | Lows  

EURUSD               1.12469 | 1.1217

USDJPY                107.375 | 107.119

GBPUSD               1.23728 | 1.23259

USDCHF               0.94824 | 0.94713

AUDUSD              0.68863 | 0.6847

NZDUSD               0.64352 | 0.64074

USDCAD               1.36969 | 1.36479

EURCHF               1.06516 | 1.06351

EURGBP               0.91008 | 0.90855

EURJPY                120.627 | 120.18

 

For Today

 

  • GBP: Opening unchanged and very little premarket trading to hold around the 1.2335 areas with minor dip through to the 1.2325 area but holding through to the Tokyo session before slow careful trading higher through to the 1.2370 area before holding quietly for the move into the grey hour, Downside congestion to the 1.2300 level with weak stops on a break through however, congestion likely to soak up the stops and any move through to test the 1.2200 level likely to be slow going with congestion likely to continue with a mix of stops on a push through the 1.2160 area for a stretch to the 1.2100 level, Topside offers light through to the 1.2400 level and weak stops could cause a small short squeeze with some offers through the 1.2500 levels and increasing weakness until above the 1.2550-1.2600.
  • JPY: Opening unchanged around the 107.20 levels and the market quickly pushing for the 107.10 level and then ranging through into Tokyo around the 107.20 area again with Tokyo fix pushing towards the 107.35 area before slipping slowly back for a quiet move to the lows again for the move into the grey hour, Downside weak through the 107.00 level before opening for a fresh run at the 106.50 area and possible short term buying through to the 106.00 level where bids are likely to increase, a break through to the 105.90 areas is likely to see weak stops appearing, limited bids through to the 105.50 area and increasing through to the 104.80. Topside offers light through to the 107.00-20 area with some weak stops possible on a strong push through the 107.30 area opening a limited short squeeze through to the 107.60 level before stronger offers start to filter through into the market and increasing into the 108.00.
  • AUD: Dipping in early trading for the lows of the session just through the 0.6850 area before slowly pushing through to the 0.6885 area into mid-session before starting to drift a little back to the 0.6870 for the move into the grey hour, Topside offers light through the 69 cents level and opening only a little on a break above the 0.6920 area and light stops pushing to the 0.6950 area, 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 around the 1.1220 area and In line with Fridays close to push into the Tokyo session steadily rising through to the 1.1245 area on the strongest move so far, a limited slip back to the 1.1240 area for the grey hour saw a slow session for the Euro and generally across FX, downside congestion through the 1.1200  level with weak stops likely on a strong move through the 1.1170 area opening up a quick test through the 1.1150 level before hitting stronger congestion through to the 1.1100 level from the beginning of the month and vulnerable to a stronger move through to 1.1050 before the market starts thickening for the sentimental 1.1000, Topside congestions through the 1.1350 level with increasing offers likely through to the 1.1400 level with strong stops likely on a move through the 1.1420 area to open up a quick move through  to the 1.1450 area before slowing as the market moves to the sentimental 1.1480-1.1520 area and possibly a bid tone.

 

Overnight News

 

USD:

Pandemic threatens to veer out of control in US – Harvard Gazette

Chesapeake energy files for chapter 11 protection in Texas – RTRs

Texas positive test rate soars to record 14.31% – State dept – BBG

USD/EM:

Coronavirus triggers USD drain in big emerging markets – Nikkei

EUR:

ECB’s Schnabel warns Euro Area inflation could dip below 0%

Bundesbank must decide on ECB bond purchases – Top Court – National Post

EUR/GBP:

UK must reveal state aid plan to unblock Brexit talks, EU warns – RTRs

USD/CNY:

US should sanction Chinese Banks for repression in China – DJ

NZD:

RBNZ’s Orr: Bank Capital buffers will need to be rebuilt – GGB

Orr: Buffer rebuild contingent on conducive economic conditions

Orr: Now is not time for credit crunch to develop

Orr: Welcomes decline in retail interest rates

 

Today’s Data

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

CNY       Chinese Industrial Profit YoY (MAY) A 6.00% | P -4.30%

CNY       Chinese Industrial Profit YTD (MAY) A -19.3% | P -27.4%

JPY         Retail Sales YoY (MAY) A | C -11.8% | P -13.9%

0700      EUR       Spanish CPI YoY A | P -0.9%

0700      EUR       Spanish HICP YoY (JUN) A | C -0.5% | P -0.9%

1200      EUR       German CPI MoM (JUN) A | C 0.3% | P -0.1%

1230      CAD       Building Permits MoM (MAY) A | P -17.1%

1230      CAD       RMPI MoM (MAY) A | P -13.4%

1400      USD       Pending Home Sales MoM (MAY) A | C 19.7% | P -21.8%

 

Harry Hindsight

 

  • GBP: Opening around the 1.2420 level and struggling through into the Tokyo session pushing the 1.2430 area before slowly drifting through to the 1.2410 level for the run the grey hour pushing through steadily to the 1.2435 level and the high of the day, London were sellers from the opening and the market tested steadily through to the 1.2400 level before ranging around the level through to the NYK session where further selling moved through the market and the push for to the low of the day around the 1.2315 level coincided with the NYK option cut and a slow recovery through the close in London to test back to the 1.2350 level before drifting to the close.
  • JPY: Opening around the 107.20 level and quickly pushing through the 107.25 to make the Asian highs before ranging in the 107.10-20 area through to the London session testing quickly through the 107.00 level to then push through to the 106.90, a brief pause before stepping lower again with the market pressing through to just before the NYK opening testing the 106.80 level for the low of the day and then starting a tight channelled run through to the opening levels before pausing and running for a second push triggering weak stops through the Asian high to test to the 107.35-40 area before dipping back and drifting a little for the move to the close almost unchanged.
  • AUD: Weaker over the course of the day however, limited from the opening rising from the 0.6890 level to the 0.6895 area for the highs of the day before dropping quickly through to the 0.6865 area on the move into the Tokyo fix, a bounce back to the 0.6880 level and a slow grind through to the highs again for the move into the grey hour, London seemed devoid of interest with the market holding 0.6890-80 for the most part until the NYK opening and the Oz quickly trading through to the 0.6840 level before starting a recovery into the London close however, while it did make 0.6870 again it drift to the close around the 0.6860 area.
  • EUR: A reasonable tight range through a slow Friday for the markets, opening around the 1.1220 level the market saw a minor dip through to the 1.1210 into Early Tokyo before recovering and testing the 1.1225 area just above the opening level, London saw early Europeans selling through to the 1.1205 area before London quickly reversed it and took the market initially to the 1.1230 pause and then run to the high just short of the 1.1240 level, A quiet drift through to the NYK session however, NYK did take it lower on light selling for the Euro to di[p through the 1.1200 area before starting a steady tight channelled push to the 1.1235 level before drifting to the close.

 

Yesterday’s Premiership Results

JPY         Tokyo Core CPI YoY (JUN) A 0.2% | C 0.2% | P 0.2%

EUR       ECB President Lagarde Speaks

USD       Core PCE Price Index YoY (MAY) A 1.0% | C 0.9% | P 1.0%

USD       Core PCE Price Index MoM (MAY) A 0.1% | C 0.2% | P -0.4%

USD       PCE Price Index YoY (MAY) A 0.5% | P 0.5% | R 0.6%

USD       PCE Price Index MoM A 0.1% | P -0.5%

USD       Personal Spending MoM (MAY) A 8.2% | C 9.0% | P -13.6% | R -12.6%

USD       Michigan Consumer Expectations (JUN) A 72.3 | C 73.1 | P 73.1 | R 65.9

USD       Michigan Consumer Sentiment (JUN) A 78.1 | C 79.0 | P 78.9 | R 72.3

USD       US Baker Hughes Total Rig Count A 265 | P 266

 

Best Regards

Andy

 

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