London Session Forex Recap – May 8, 2015

  • Swiss jobless rate: 3.3% actual v.s. 3.2% expected, 3.2% previous
  • German industrial production m/m: -0.5% actual v.s. 0.4% expected, 0.2%
  • German trade balance: 19.3B actual v.s. 20.3B expected, 19.7B
  • U.K. Halifax HPI m/m: 1.6% actual v.s. 0.3% expected, 0.4%
  • Swiss CPI m/m: -0.2% actual v.s. 0.1% expected, 0.3%
  • Italian industrial production m/m: 0.4% actual v.s. 0.3% expected, 0.6%
  • U.K. trade balance: -10.1B actual v.s. -9.8B expected, -10.3B
  • U.S. and Canadian jobs data on tap

It looks like the morning London session was the calm before the storm, with most forex pairs locked in tight ranges and some ending the session flat. This apparent lack of volatility is probably due to traders sitting on their hands (or biting their nails) ahead of the coming storm: the U.S. April jobs report.

Most comdoll pairs saw very limited volatility, with many ending the session flat. The Greenback and the Swissy had a mixed performance while the yen was slightly weak overall. As for the euro, it showed slight strength during the session but was still down for the day. There weren’t any real catalysts for the strength because most economic data for the session were in the red and there weren’t any major development in the Greek talks either.

EUR/USD is up by 24 pips (+0.22%) to 1,1217, EUR/JPY is up by 37 pips (+0.28%) to 134.64, and EUR/CHF is up by 28 pips (+0.27%) to 1.0371.

The pound, which has been the star of the Asian session, finally managed to calm down and stumble a bit during the morning London session. It started the session strong, most likely due to a better-than-expected read for the Halifax house price index, which indicated an improving housing industry. It then slid down thanks to U.K. trade deficit being worse-than-expected, leading traders to book profits on their pound longs ahead of the NFP.

GBP/USD is down by 44 pips (-0.29%) to 1.5409, GBP/JPY is down by 20 pips (-0.11%) to 185.17, and GBP/AUD is down by 51 pips (-0.27%) to 1.9483.

The forex calendar for the afternoon London/morning U.S. session has top-tier jobs data on the menu and promises a lot of volatility for the Greenback and, to a lesser extent, the Loonie.

At 1:15 pm GMT, we’ll start with Canadian housing starts (187K expected, 190K previous) as an appetizer. This data point is a leading indicator for the housing market but is usually overshadowed by the Canadian jobs report. Nonetheless, it may cause some opening moves in the Loonie so keep an eye out.

For the main course at 1:30 pm GMT, we’ll be having the U.S. non-farm payrolls (228K expected, 126K previous), the U.S. jobless rate (5.4% expected, 5.5% previous), the Canadian employment change (-4.5K expected, 28.7K previous), the Canadian jobless rate (6.9% expected, 8.8% previous), and the U.S. average hourly earnings (0.2% expected, 0.3% previous). For a more thorough discussion,  you can check out Forex Gump’s forex trading guide for the NFP release.

For dessert, we’ll be having U.S. wholesale inventories (0.3% expected, 0.3% previous) at 3:00 pm GMT. This is considered a low-tier data point so the market may not react much, but still, it’s good to know that it’s coming out.

As a bonus, at 2:45 pm GMT, Federal Reserve Bank of New York President William Dudley is scheduled to speak at the annual Bronx Bankers Breakfast. He may drop some juicy hints about his views on the economy and future monetary policy.  And because he is a member of the Federal Open Market Committee (FOMC), his views tend to hold more weight, so keep an ear out.

Well, that’s all for now, forex friends. Stay frosty and stay tuned!

See also:

Asia Session Recap

U.S. Session Recap

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