London Session Forex Recap – Oct. 9, 2014

  • German Trade Balance: 14.1B EUR vs. 13.8B EUR forecast, 20.1B EUR previous
  • French Trade Balance: -5.78B EUR vs. -5.5B EUR forecast, -5.54B EUR previous
  • Bank of England holds interest rates at 0.5%; no change to monthly asset purchases program

Weak trade balance data from Europe and the Bank of England monetary policy decision help provide a small spark to a mostly quiet morning London session.

Both Germany and France posted weak trade balance data, which continues to highlight the struggles of the recovery in Europe.  The data came out before the London open, so as soon as we heard the opening bell, forex traders went into light sell mode on the euro.  After hitting highs around 1.2790, EUR/USD is back to the 1.2740 area as the U.S. begins to open.

From the U.K., the Bank of England decided to hold rates at 0.5% and make no changes to its asset purchasing operations.  There is no press conference to follow up the decision, and there hasn’t been a change to policy since 2012, so this event no longer sparks any meaningful reaction in Sterling for now. The British pound is mixed on the session, trading near session open prices on most pairs.  After hitting highs for the session around 1.6225, GBP/USD is back trading just below 1.6200.  We’ll get more details on the Bank of England’s meeting with the minutes release on Oct. 22.

The forex calendar may continue to underwhelm for the Thursday afternoon London/morning U.S. trading session with only low to mid tier data points in the lineup.

At 1:30 pm GMT, we’ll get Canadian house price index data for a read on how new homes are selling.  The forecast is for a 0.1% tick higher than the 0.0% previous read.  We’ll also get the weekly initial jobless claims number from the U.S., expected to come in higher to 295K vs. 287K to possibly show more people leaving or losing their jobs last week.

At 3:00 pm GMT, we’ll get the U.S. wholesale inventories data for an indicator on potential business spending in the future.  The forecast is for the number to improve to 0.3% vs. 0.1% previous, but keep in mind that this is still below the 1.1% peak we saw in the early summer.

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!