London Session Recap – April 4, 2014

  • German Factory Orders mixed: 0.6% vs. 0.5% forecast, but previous revised down to 0.1%
  • U.K. Halifax House Price Index weaker-than-expected m/m: -1.1% vs. 0.6% forecast, 2.5% previous
  • Coming up: U.S. Non-Farm Payrolls net change forecast at 200K vs. 175K previous, unemployment rate forecast: 6.6%.
  • Coming up: Canadian net jobs change forecasted at 22.5K vs. -7K previous ; unemployment rate at 7.0%

The morning London session saw a slight pick up in forex volatility from the Asia session, but remains tight ahead of the U.S. employment data.

German factory orders came in mixed with monthly number ticking higher, but a revision to the previous read brought the yearly number below forecasts (6.1% vs. 6.8% expected).  And similar to the rest of this week, the U.K. was hit with another weak economic number in the form of the Halifax price index number, with the yearly read also ticking lower to 8.7% vs. 9.4% forecast. Both currencies are slightly down on the session, with the euro bouncing back from lower levels thanks to the positive German monthly read:

EUR/USD is down 12 pips (-0.09%) to 1.3705, GBP/USD is down by 27 pips (-0.16%) to 1.6567, and EUR/GBP is up 9 pips (+0.15%) to .8275.

It’s that time of the month where we’ve got a slew of major economic news from North America, most notably: employment data.

At 1:30 pm GMT, U.S. Non-Farm Payrolls report is once again the highly anticipated event as traders are waiting to see if the end of the extreme weather means a big boost to the U.S. jobs market. Some estimates have gone as high as 275K net adds, which could signal a return to a job creation trend. A positive read could be dollar positive, but risk negative as it supports the case for further Tapering of bond purchases by the Federal Reserve.

At the same time as U.S. jobs numbers is the release of the Canadian jobs report. While not as big a market mover the NFP report is, this data point can easily push the Loonie up and down, especially in the cross pairs like CAD/JPY, EUR/CAD and AUD/CAD.  In February we saw a negative read for Canada of a net loss of 7K jobs, but expectations are for a bounce back.

And to wrap up this week’s economic data, we’ll get the Canadian Ivey PMI number at 3:00pm GMT.  It is a second tier event, so look for the Loonie to move big all the way into the weekend.  Stay safe and good luck!

See also:

Asian Session Recap

U.S. Session Recap

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