London Session Recap – May 19, 2014

  • Japanese Yen strengthens on risk aversion flows.

With a lack any major economic data points or news events, violence in east Ukraine and from anti-China protests in Vietnam and possibly from last week’s weak European data have traders running away from risk assets to safe have assets.  Japanese Yen pairs are some of the the biggest movers on the session, especially against the comdolls.

USD/JPY is down 21 pips (-0.21%) to 101.18, AUD/JPY is down 22 pips (-0.24%) to 94.74, and CAD/JPY is down 26 pips (-0.28%) to 93.14.

We also saw forex traders price in British Pound weakness after BOE Governor Carney shared concerns that rising housing prices were the biggest threat to the U.K. economy.  Sterling fell as much as 0.19% to .8157 against the euro on the session but is now fading those losses and gaining strength as we head into the U.S. session:

GBP/USD is up 29 pips (+0.17%) to 1.6837, EUR/GBP is now up only 10 pips (+0.13%) to .8146, and GBP/CHF is back to breakeven at 1.5005 after testing 1.4980 as the low of the session.

The afternoon London/morning U.S. session calendar is barren, so price action will most likely be subdued and direction influenced by broad risk sentiment (European and Asian equity markets are closing down on the day).   Canada is on holiday in observance of Victoria Day so liquidity may be lighter than usual, opening up the possibility of short-term volatility spikes and tight ranges.

See also:

Asian Session Recap

U.S. Session Recap

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