London Session Forex Recap – Apr. 23, 2015

  • German Gfk Consumer Sentiment: 10.1 vs. 10
  • Swiss Trade Balance 2.52B CHF vs. 2.12B CHF forecast, 2.32B CHF previous
  • German Flash Manufacturing PMI: 51.9 vs. 53.0 forecast, 52.8 previous
  • European Flash Manufacturing PMI: 51.9 vs. 52.6 forecast, 52.2 previous
  • U.K. Retail Sales m/m: -0.5% vs. 0.4% forecast, 0.6% previous; core at 0.2% vs. 0.5% forecast, 0.6% previous
  • U.K. Public Borrowing: £7.4B vs. £7B forecast, £5.5B previous

It was a very busy forex calendar for the morning London session, and unfortunately it was a sea of red for Europe and the U.K.

Fortunately for euro bulls, the weakening of the monthly purchasing manufacturers index data was likely overshadowed by European Central Bank member Peter Praet, saying that the eurozone economy is getting back on the growth track, or possibly on the effects of the better-than-expected Swiss trade balance data since the correlation and trading relationship is strong between the two economies. What ever the case may be for euro and franc bullishness, both currencies are seeing nice gains on the session relative to the other majors:

USD/CHF is down 57 pips (-0.59%) to .9654, EUR/USD is up 23 pips (+0.22%) to 1.0745, and EUR/CHF is down 37 pips (-0.36%) to 1.0377

Volatility in the British pound also picked up thanks to the weaker-than-expected retail sales numbers, giving us red in both the monthly and year-over-year reads.  A dip in fuel sales is the likely cause and adds fuel to the argument that economic growth may be slowing. Sterling took a fall as expected, with exception to the Aussie and Kiwi who both continue hold their losses sparked in Asia session trading, but seems to be gaining some of its value back ahead of the U.S. open, possibly on the big improvement of the public borrowing data:

GBP/USD is down 6 pips (-0.02%) to 1.5028, GBP/NZD is up 250 pips (+1.28%) to 1.9863, GBP/CHF is down 101 pips (-0.70%) to 1.4499

And close out the price action wrap-up, I had to mention that the pummeling sparked in the Asia session on the Kiwi and the Aussie continued in London trade, especially of note that both are falling hard to the  rally in the euro and Swiss franc:

AUD/CHF is down 70 (-0.94%) to .7495, NZD/CHF is down 143 pips (-1.99%) to .7291, AUD/NZD is up 116 pips (+1.15%) to 1.0225

The forex calendar for the Thursday afternoon London/morning U.S. session has a few mid-tier market movers from the U.S. to hopefully keep the volatility rolling.

At 1:30 pm GMT, we’ll get the weekly U.S. initial jobless claims data number that has been ticking higher since hitting a low of 268K three weeks ago.  The forecast for today’s number is for an improvement to 287K vs. 294K last week, and should provide some very short-term volatility for the U.S. dollar.

The economic calendar will close out for the day with the U.S. flash manufacturing PMI data (55.7 forecast/previous) at 2:45 pm GMT and then the U.S. new home sales number (520K forecast vs. 540K previous) at 3:00 pm GMT.  While global PMI’s have been the focus of the day, it doesn’t tend to be a market mover when coming from the U.S. Plus the U.S. housing sector is a big component of the U.S. economy, which always makes the new home sales a potential market mover, especially comes in above the 500K mark once again. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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