London Session Forex Recap – July 30, 2015

  • Swiss KOF Leading Indicator: 99.8 actual v.s. 90.4 expected, 89.8 previous
  • German Jobless Rate: unchanged at 6.4% as expected
  • German Unemployment Change: 9K actual v.s. -5K expected, 1K previous
  • German CPI m/m: 0.2% actual v.s. 0.3% expected, -0.1% previous
  • Spanish GDP q/q: as expected at 1.0% v.s. 0.9% previous
  • Spanish CPI m/m: -1.0% actual v.s. 0.0% expected, 0.3% previous
  • Euro Zone Business Climate Index: 0.39 actual v.s. 0.19 expected, 0.14 previous
  • Euro Zone Economic Sentiment: 104 actual v.s. 103.2 expected, 103.5 previous
  • Advanced Q2 2015 U.S. GDP estimate coming up

Unlike yesterday, most currency pairs were well-behaved during today’s morning London forex session as forex traders awaited another major event – the advanced estimate for Q2 2015 U.S. GDP. As usual, there were a few currencies that just couldn’t resist misbehaving.

As can be expected, the first naughty currency on the list was the Greenback. The Greenback was inching its way higher throughout the forex session even though there weren’t any major catalysts that were released, so it may just be the usual pre-emptive positioning ahead of the market-moving GDP data for later.

USD/JPY is up by 22 pips (+0.18%) to 124.36, AUD/USD is down by 31 pips (-0.42%) to 0.7271, NZD/USD is down by 22 pips (-0.33%) to 0.6604

Next on the naughty list is the Loonie. The only apparent catalyst for the Loonie’s strength was the surge in oil prices, with Brent crude oil up by 1.46% to $54.16 per barrel during the forex session after closing at $53.38 per barrel yesterday. Digging around for a catalyst to the climbing oil prices, the most likely culprit seems to be the report that Saudi Arabia is planning to reduce its oil production by 200,000 to 300,000 barrels a day when summer ends. That is certainly good news for oil-producers such as Canada and helps to blunt the potential increase in global oil supply (and lower oil prices) due to the Iran deal.

USD/CAD is down by 5 pips (-0.04%) to 1.2973, NZD/CAD is down by 29 pips (-0.33%) to 0.8569, AUD/CAD is down by 41 pips (-0.43%) to 0.9434

The pound also made its way to the naughty list, as European traders sent the pound soaring yet again. But unlike yesterday’s London forex session, there weren’t any direct catalysts this time, so the usual suspect is the risk-on market sentiment that could have generated some demand for the high-yielding pound, with the FTSE 100 up by 0.73% to 6,679.30 while a round of bond-selling caused U.K. 10-year bond yields to widen by 0.30% to 1.984%.

GBP/USD is up by 27 pips (+0.18%) to 1.5631, GBP/JPY is up by 68 pips (+0.35%) to 192.39, GBP/AUD is up by 122 pips (+0.60%) to 2.1494

As for the euro, it was mostly up for the forex session, thanks to a whole slew of mostly positive economic data that came out. The euro was pretty well-behaved, though, relative to those that made it to the naughty list since volatility was rather subdued among the euro pairs. It’s just a hunch, but there weren’t any major updates on the Greek drama during the session, which is probably why only a few forex traders were interested in the euro.

EUR/USD is down by 9 pips (-0.09%) to 1.9054, EUR/AUD is up by 46 pips (+0.31%) to 1.5062, EUR/JPY is up by 12 pips (+0.09%) to 136.25

The forex calendar for the upcoming afternoon London/morning U.S. session has a data blitz in store at 1:30 pm GMT, with the simultaneous release of the advanced estimate of Q2 2015 U.S. GDP (2.5% expected, -0.2% previous), the GDP price index (1.5% expected, 0.0% previous), the U.S. jobless claims (270K expected, 255K previous), and the goods trade balance.

All of them are usually market-movers on their own, but most forex traders would probably be focusing on the advanced estimate for Q2 U.S. GDP since it is expected to show an expansion, which would validate the Federal Reserve’s projection that the economic contraction would be temporary. In addition, an actual reading which meets or beats expectations would help to ensure that a potential rate hike within the year remains a probability. If you want a more in-depth analysis as well as trading tips for this event, make sure to check out Forex Gump’s latest trading guide. Stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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