- European Producer Price Index y/y inline with -0.7% forecast vs. -0.8% previous; m/m 0.0% vs. -0.2% previous
All is quiet in the forex markets to start the new week as currency traders remain cautious amid geopolitical tensions. Reports of fighting renewed in Ukraine where a passenger airline was downed last week, and we’re also hearing of a rising death toll of over 500 in the Israeli-Gaza violence. Situations like these tend to affect local markets after the initial broad global reaction, but the situation remains fluid so caution will likely remain for today’s session.
We also saw a combination of a Japanese bank holiday and a lack of European economic data during the morning London session to contribute to the market’s sleepiness.
What we did get was slightly higher than expected German PPI data at 2:00 am GMT, which didn’t produce much of a reaction in the euro pairs. Overall, we’re only seeing a real change in rates among the comdoll pairs, but not much more than 10 – 15 pips moves since the week open, possibly on traders making adjustments ahead of the RBNZ meeting this week (check out our forex trading guide for that event by Forex Gump). This makes the comdoll and European cross pairs the ones to watch for now, including the big movers of the day:
NZD/CHF up 19 pips (+0.25%) to hold above .7800, GBP/AUD up 33 pips (+0.18%) to hold above 1.8200 and NZD/USD up 13 pips (+0.15%) but unable to break above .8700
The forex calendar for the first afternoon U.K./morning U.S. trading session is barren, which means forex traders will only have new developments within the geopolitical drivers to influence price action. Also take note that U.S. equity markets are ramping up their earnings season to possibly influence broad risk sentiment and give insights on U.S. economic health. Stay frosty!
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