London Session Recap – June 30, 2014

  • German Retail Sales m/m: -0.6% vs. 0.8% forecast, -1.5% previous
  • European M3 Money Supply: 1.0% vs. 0.8% forecast/previous
  • Bank of England Net Consumer Credit inline with forecast/previous at 0.7B GBP; Mortgage Approvals lower at 61.7K vs. 61.8K forecast, 62.8K previous
  • European Flash HICP at 0.5% vs. 0.7% forecast, 0.5% previous; Core at 0.8% vs. 0.7% forecast/previous

Comdolls are in retreat while European currencies have kicked into rally mode to start the London trading session.

Without a direct catalyst, we’re not sure why the Aussie and Kiwi are pulling back, but it may be a part of broad risk aversion as Asia and Europe equities are in the red, as well as U.S. futures.  The comdolls went into sell mode just ahead of the European open and are still trading around session lows:

AUD/USD is down 26 pips (-0.28%) to .9394, NZD/USD is down 26 pips (-0.30%) to .8740, and USD/CAD is up 21 pips (+0.20%) to 1.0681

But in Europe, the euro is on the rise despite weak German retail sales data and HICP staying flat, possibly indicating the “ECB rate cut” trade may be priced in.  When combined with the comdoll weakness, we’re seeing some of the biggest moves of the day in the cross pairs:

EUR/AUD is up 56 pips (+0.39%) to 1.4530, EUR/CAD is up 35 pips (+0.24%) to 1.4584, and the big mover on the session is EUR/NZD, up 80 pips (+0.51%) to 1.5617

The first afternoon London and U.S. trading session of the week could be action packed with potential catalysts from both the U.S. and Canada

At 1:30 pm GMT, we’ll get the monthly Canadian GDP read, forecasted to tick slightly higher to 0.2% vs. 0.1% previous.  This is a top tier event for the Loonie, so watch out for your Canadian Dollar trades on this hour, especially if the read comes out weaker-than-forecast/previous.

At 2:45 pm GMT we’ll get the U.S. Chicago PMI number (forecasted to come in lower at 63 vs. 65.5) and at 3:00 pm GMT we’ll get pending home sales data expected to come in better-than-expected at 1.2% vs. 0.4% previous.  Both are mid-tier events and if their numbers conflict as expected, look for some choppiness for the Greenback to close out the European trading session.  Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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