London Session Forex Recap – Oct. 6, 2014

  • German Factory Orders (sa) m/m: -5% vs. -2.5% forecast, 5.9% previous
  • European Sentix Indicator: -13.7 vs. -11 forecast, -9.8

With the big positive U.S. jobs data behind us for the month, the U.S. dollar went into sell mode as soon as European trading opened up, most likely taking profits on dollar longs amid the debate on when the Fed will hike interest rates.  The Greenback is down against all of the majors, especially against the commodity dollars:

EUR/USD is up 48 pips (+0.38%) to 1.2556, USD/JPY is down 40 pips (-0.37%) to 109.31, and AUD/USD is up 49 pips (+0.57%) to .8720

From Europe, we got weak German factory orders data and a weak read for the Sentix composite index, but because of the focus on U.S. dollar selling, this weakness has put very little pressure on euro pairs.  After bouncing off of the 137.00 handle, EUR/JPY is now trading around 137.27, down 4 pips on the session; EUR/GBP is up 24 pips (+0.32%) to .7855

The British pound is feeling some heat, possibly on comments by Business Secretary Vince Cable that the pound may be overvalued by 10% – 15%, which if true, may be putting pressure on the export industry. Sterling is down across the board on the session, with momentum still very strong:

GBP/JPY is down 50 pips (-0.29%) to 174.70, GBP/AUD is down 73 pips (-0.40%) to 1.8319, and GBP/CAD is down 29 pips (-0.17%) to 1.7917

The forex calendar for the first U.S. trading session of the week is extremely light with only the Ivey PMI number coming out at 3:00 pm GMT. This will give us a read on economic activity in Canada, based on purchasing managers surveys, and it is forecasted to come in at 52.9 vs. 50.9.  We should note that for much of 2014, this number tends to  come in below expectations.

With such a light calendar, look for Asia and European sentiment to continue to influence forex price action, as well as sentiment from the U.S. equity markets. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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