London Session Recap – May 2, 2014

  • European Manufacturing PMI better-than-expected: 53.4 vs. 53.3 forecast/previous
  • European Unemployment inline with previous but beats forecast: 11.8% vs. 11.9% forecast, 11.8% previous
  • U.K. Construction PMI ticks lower: 60.8 vs. 62.2 forecast, 62.5 previous
  • Coming up: U.S. Non-Farm Payrolls net change forecast at 218K vs. 192K previous, unemployment rate forecast: 6.6% vs. 6.7% previous

The euro saw a boost from mostly positive manufacturing PMI data from Europe; the only disappointment was from Germany with a slight tick lower to 54.1 vs. 54.2 forecast/previous.  Euro pairs are slightly up on the session, but again the upcoming U.S. jobs data is keeping volatility quiet for now:

EUR/USD is down 8 pips (-0.06%) to 1.3859, EUR/JPY is up 22 pips (+0.16%) to 142.09, EUR/AUD is up 25 pips (+0.17%) to 1.4974.

The other big mover from the majors is sterling, down after a disappointing read from construction PMI, especially against the U.S. Dollar and Swiss Franc:

EUR/GBP is up 9 pips (+0.12%) to .8217, GBP/USD is 26 pips (-0.16%) to 1.6863, GBP/CHF is down 16 pips (-0.11%) to 1.4827.

One last piece of price action to note is the New Zealand Dollar, up on the session against all of the majors.  There doesn’t seem to be a direct catalyst, which means the move may be technical in nature.

NZD/USD is up 15 pips (+0.17%) to .8645, NZD/JPY is up 32 pip (+0.36%) to 88.59, and GBP/NZD is down 51 pips (-0.26%) TO 1.9507

At 1:30 pm GMT, we’ll get the U.S. Non-Farm Payrolls report which is once again highly anticipated as traders are waiting to the see what the employment situation looks like without the effects of extreme weather. Market analysts forecast a higher read at 215K and a tick lower in the unemployment rate to 6.6%.  It looks like forex traders are pricing in a very good number with the Greenback slightly up against most of the majors.  Besides the headline numbers, pay attention to the previous month revisions as they can influence the overall sentiment on this big piece of economic data.

At 3:00 pm GMT, we’ll close out the week with U.S. Factory Orders data, forecasted to come in at 1.5% vs. 1.6% previous.  Unless we see a whopper number here or surprise news event, expect market sentiment to be driven by the U.S. jobs data into the weekend.  Stay frosty!

See also:

Asian Session Recap

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis.

 Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!