London Session Recap – April 1, 2014

  • Swiss Manufacturing PMI: 54.4 vs. 56.5 forecast, 57.6 previous
  • German Unemployment Rate ticks lower to 6.7% vs. 6.8% forecast, inline with previous
  • U.K. Manufacturing PMI 55.3 vs. 56.7 forecast, 56.2 previous
  • European Unemployment rate better-than-expected at 11.9% vs. 12% forecast, 11.9% previous

Without geopolitical and economic crisis fears to drive forex traders to move, the focus was on economic data in the morning London session. The euro, Sterling and the Swiss Franc saw an increase in volatility, with the better-than-expected European unemployment data and weaker-than-expected U.K. manufacturing PMI data igniting one of today’s biggest moving currency pairs: EUR/GBP is up 39 pips (+0.48%) to .8299. GBP/CHF was also a drew currency trader’s attention, making it another relative mover on the session, down 63 pips (-0.43%) to 1.4667.

The euro unemployment data–while still historically bad–was better-than-expected and another catalyst this week to turn trader’s attention away from potential negative deposit rates by the ECB, supporting the euro higher across the board on the session:

EUR/USD is up 30 pips (+0.22%) to 1.3796, EUR/JPY is up 51 pips (+0.36%) to 142.57, and EUR/AUD is up 77 pips (+0.51%) to 1.4932.

For the afternoon London/morning U.S. session overlap,  we just got Canadian inflation data in the form Raw Materials and Industrial Product price index. Both reads came in better-than-expected on the forex calendar, selectively boosting the Loonie against the majors:

GBP/CAD  is down 46 pips (-0.25%) to 1.8358, CAD/JPY is up 20 pips (+0.21%) to 93.58, and AUD/CAD is down 28 pips (-0.27%) to 1.0203.

And at 1:45 pm GMT, the U.S. will release its manufacturing PMI number, and then at 2:00 pm GMT, we’ll the big number of the day from the U.S.–ISM Manufacturing data.  This is expected to come in slightly higher above previous at 54.0 vs. 53.2.  It is a tier one event, so expect it to spark short-term volatility, especially if we see a big outlier read from forecast or previous.

Finally, we are seeing broad risk sentiment in favor of risk taking across the globe for the second day in a row, which means safe havens like the Japanese Yen and U.S. dollar may feel another day of pressure for the Tuesday session.  Stay frosty!

See also:

Asian Session Recap

U.S. Session Recap

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