London Session Recap – July 31, 2014

  • German Retail Sales m/m: 1.3% vs. 1.0% forecast, -0.6% previous
  • U.K. Nationwide House Prices (nsa) weaker: 10.6% vs. 11.3% forecast, 11.8% previous
  • French Consumer Spending m/m is up: 0.9% vs. -0.4% forecast, 0.7% previous
  • German Unemployment Change improves: -12K vs. -5K forecast, 7K previous; but Unemployment rate stays at 6.7%
  • European Unemployment Rate ticks lower to 11.5% vs. 11.6% forecast/previous
  • European HICP core inline with forecast/previous at 0.8%, but ticks 0.4% from 0.5% forecast/previous on the headline number

We had lots going on for the morning London session thanks to a slew of European data, as well as a continuation of momentum from the Asia and U.S. sessions.

Thanks to negative Australian housing and import data during the Asia session, forex traders continued to push the Aussie lower at the European open, prompting several pairs to test and break major psychological levels.

AUD/USD is down 37 pips (-0.40), breaking and sustaining below the .9300 handle,  EUR/AUD is up 51 pips (+0.36%) to test the 1.4400 area, and AUD/NZD is down 37 pips (-0.34%) to drop back down and sustain below 1.1000

The European calendar was stuffed and a big spark to euro volatility thanks to a slew of positive data that must’ve been a sight for sore euro bull eyes.  Positive German data turned the tide for euro sentiment temporarily, but because of the different catalysts driving the market today, the reaction has been mixed against the majors:

EUR/USD is down 15 pips (-0.12%) to 1.3380, EUR/GBP is up 9 pips (+0.11%) to .7921, and EUR/JPY is at breakeven for the session, trading around 137.67

And to continue the sweet volatility into the end of the Thursday session, we’ve got import Canadian and U.S. data coming up on the forex calendar.

At 1:30 pm GMT, we’ll be hit with the weekly U.S. initial claims data, forecasted to come in around 300K vs. 284K previous.  Coming above the previous read could add fuel to the speculation we may see a weak NFP number tomorrow, sparked by yesterday’s weaker-than-expected private payrolls number from ADP.  At the same time, we’ll get the big mover of the session, in the form of the monthly Canadian GDP.  This is forecasted to rise to 0.4% vs. 01.%, which could be a big positive for a Canadian dollar that has been hit hard in the past week.

And at 2:45 pm GMT, we’ll get the Chicago PMI report for another read on manufacturing conditions in the U.S.  The forecast is for a tick higher to 63 vs. 62.6 previous, and since this is a mid tier event, we could see a bump in volatility for the Greenback to close the London trading session out.

Finally, today’s headlines are filled with new financial market risks, including the Argentina default on bond payments and another round of bad news from Banco Espirito Santo that could affect European financial markets.  Stay frosty forex traders!

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!