London Session Recap – July 14, 2014

  • European Industrial Production weaker: m/m at -1.1% vs. -1.2% forecast, 0.7% previous; y/y inline with forecasts at 0.5% but below 1.4% previous

It looks like forex traders were slow to get to their screens after the weekend, but risk-on sentiment was in play as we saw Asia and European equities on the uptick, as well as European currencies.  Could it be the feel-good after affects of German’s World Cup win?  Further bounce from the Portuguese bank scare last week?

I’m not sure, but the rallies seemed to have stalled and faded after we got another round of weak European data in the form of industrial production.  Both monthly and yearly reads came in below their previous reads, with only the energy sector showing any signs of growth. The bullish sentiment has lost some steam for now, but the euro and risk-on plays (weak Japanese Yen) are still up on the session:

EUR/USD is up 20 pips (+0.15%) to 1.3627, EUR/JPY is up 49 pips (+0.36%) to 138.30, and EUR/GBP is up 23 pips (+0.30%) to .7961

The forex calendar for the first afternoon U.K./morning U.S. trading session of the week is bare, so currency traders will have to continue to take their cues mostly from broad risk sentiment in the equities markets.  Without fresh news or catalysts, it’s most likely we’ll see U.S. traders follow the leads of Asia and Europe as U.S. futures indicate a positive opening.

We’ll also see ECB President Mario Draghi testifying today on monetary policy to the European Parliament’s Committee on Economic and Monetary Affairs.  The expectation is that he will speak on the recent 700B EUR lending program for banks to keep the system flush with cash, but no new insights to monetary policy is likely.  Regardless, when this man speaks, we should all listen and be ready with adjustment plans in case we see a surprise.  Stay frosty!

See also:

Asia 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!