London Session Recap – Aug. 21, 2014

  • European PMI’s weaker
  • Flash Manufacturing PMI 50.8 vs. 51.3 forecast, 51.8 previous
  • European Flash Composite PMI dips to 52.8 vs. 53.4 forecast, 53.8 previous
  • European Flash Services PMI down to 53.5 vs. 53.7 forecast, 54.2 previous
  • U.K. Retail Sales m/m down to 0.1% vs 0.4% forecast, 0.2% previous; ex Auto Fuel 0.5% vs. 0.4% forecast, -0.1% previous

European PMI data mostly came in below expectations once again, with the only above forecast reads coming from French and German Services PMI surveys.  The initial reaction was a pop higher in euro pairs (probably due to already oversold conditions/profit taking) but it looks like that it didn’t take too long for forex traders to fade the move. Price action is choppy, but it looks like euro pairs are trading near breakeven on the session; EUR/USD is up only 2 pips to 1.3260

British Pound price action is also choppy after posting a weaker headline retail sales number, but ticked higher without fuel costs factored in. The initial reaction was a drop on that headline read, but like the euro, most Sterling pairs have been fade back to near breakeven on the session; GBP/USD is down only 2 pips to 1.6591

The forex calendar for the afternoon U.K./morning U.S. session is loaded with U.S. data to hopefully keep the forex trading opportunities coming.

At 1:30 pm GMT, we’ll get the weekly U.S. initial claims report for a fresh read on unemployment trends. It’s been a positive trend since the beginning of 2014 where weekly claims were coming in around 350K, so anything around the 300K area we’ve seen recently should continue to bring in Dollar bulls.

At 2:45 pm GMT, we’ll get the U.S. Flash manufacturing PMI read, forecasted to tick lower to 55.7 vs. 55.8 previous.  This is a low tier data point, so don’t expect too much reaction unless we get a big divergence between actual vs. forecast/previous.

And at 3:00 pm GMT, we’ll get various sector reads from the U.S. with the CB leading index, existing home sales, and the Philadelphia Fed Manufacturing Index number.  The Philly Fed number is the most likely market mover as it is rated top tier and has been on an uptrend since February.  Another positive read could support the less dovish outlook of the FOMC we saw yesterday, potentially providing more support to the Greenback.  Of course, a weaker read may stir things up and lead traders to take some profits from yesterday’s strong Greenback rally off of the table.  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!

  • ForExchange

    Wow, is PipDiddy on vacation? You have done the recap though very good! I even think he used your account because it looks that similar 🙂

    • Pipcrawler

      When I read this comment I was like, “huh, I wrote pipnoculars this morning?” haha Nah, PipDiddy wrote it, but the avatar was a technical glitch that got fixed 🙂