- French INSEE Business Confidence index ticks lower: 97 vs. 98 forecast/previous
- U.K. BBA Mortgage Approvals better-than-expected: 43.27K vs. 41.38K forecast, 41.88K previous
- U.K. CBI Distributive Trades rises: 21% vs. 15% forecast, 4% previous
Price action was mostly subdued during the morning London session, but Sterling kept things interesting with fresh economic data and the BOE meeting minutes.
While we saw positive reads on U.K. housing and wholesale sales data, it was the unanimous vote to hold interest rates revealed in the BOE monetary policy meeting minutes that had forex traders pulling back on Sterling longs. It was the monetary policy committee’s focus on wage pressures that forex traders thinking that the interest rate hike may not be coming as soon as previously expected. The British Pound is taking a hit and it doesn’t look like bears are done just yet:
GBP/USD is down 30 pips (-0.18%) to break the minor support area at 1.7040, EUR/GBP is up 17 pips (+0.22%) to bring it back above the .7900 handle, and the big mover of the session is GBP/AUD, down 144 pips (-0.78%) to 1.8020, nearly testing the major psychological handle 1.8000.
The forex calendar for the Wednesday afternoon U.K./morning U.S. trading session has Canadian economic data points to hopefully keep volatility up for forex traders.
At 1:30 pm GMT we’ll get an important read on Canada’s economy with their monthly retail sales data. The measure of consumer spending has been erratic but mostly positive, and we’ve seen a couple of upward revisions as well to previous reads. The forecast is for a few ticks down from last month’s read (headline 0.6% forecast vs. 1.1% previous), so be ready with your Loonie positions/orders when that event hits the wires.
At 3:00 pm GMT, we’ll get the European Flash Consumer Sentiment read, with a forecast of it coming inline with the previous read -7.5. This is a low tier event, but worth of note because we get to see how the consumer perceive the economy, which may affect near-term spending habits.
And the big event of the week for the Kiwi is coming right after the U.S session close in the form of the RBNZ monetary policy statement at 10:00 pm GMT. The forecast is for the RBNZ to raise the main rate to 3.50% from 3.25%, but with the recent quarterly CPI number coming in slightly below forecast (0.3% actual vs. 0.4% forecast), there is a bit of uncertainty that the hike will follow through as demonstrated by forex traders when the Kiwi fell after the event. The potential for big volatility is there, so have your entry/exit orders ready to go ahead of the event. Stay frosty!
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