London Session Forex Recap – August 5, 2015

  • Swiss CPI y/y: -1.3% actual v.s. -1.0% expected, -1.0% previous
  • French Services PMI: unchanged at 52.0 as expected
  • German Services PMI: 53.8 actual v.s. 53.7 expected, 53.7 previous
  • Euro Zone Services PMI: 54.0 actual v.s. 53.8 expected, 53.8 previous
  • Euro Zone Composite PMI: 53.9 actual v.s. 53.7 expected, 53.7 previous
  • U.K Services PMI: 54.0 actual v.s. 58.0 expected, 58.5 previous
  • Euro Zone Retail Trade m/m: -0.6% actual v.s. -0.2% expected, 0.1% previous

Despite a whole slew of data, the market was rather subdued during today’s morning London forex session. The only real mover was the appreciating pound, although the other high-yielders were grinding their way higher too.

The pound was the king (or queen) of pips during today’s morning London forex session despite U.K. services PMI failing to meet the market’s expectations. Perhaps forex traders were optimistic that the PMI reading was still above the 50.0 mark, which means that the service sector is still expanding, albeit at a slower rate when compared to the previous reading. It’s also possible that the risk-on market sentiment may have spurred demand for the high-yielding pound since the FTSE 100 was up by 0.50% to 6,719.80 and U.K. 10-year bond yields widened by 4.05% to 1.951%.

GBP/USD is up by 72 pips (+0.47%) to 1.5630, GBP/JPY is up by 76 pips (+0.40%) to 194.25, GBP/CAD is up by 62 pips (+0.30%) to 2.0605

The high-yielding comdolls were slowly grinding higher too, especially against the safe-haven, although they all had difficulty winning out against the Greenback. The Loonie was noteworthy because it had difficulty winning out on the Greenback despite Brent crude oil futures going up by 0.68% to $50.33 per barrel during the forex session. The Kiwi was noteworthy too since it seems like European forex traders were not too keen on shorting it despite the disappointing jobs data from earlier.

NZD/USD is up by 13 pips (+0.21%) to 0.6540, NZD/JPY is up by 10 pips (+0.13%) to 81.27, NZD/CHF is up by 16 pips (+0.26%) to 0.6398

AUD/USD is up by 24 pips (+0.33%) to 0.7372, AUD/JPY is up by 23 pips (+0.27%) to 91.63, AUD/CHF is up by 26 pips (+0.37%) to 0.7214

USD/CAD is down by 21 pips (-0.17%) to 1.3180, CAD/JPY is up by 11 pips (+0.11%) to 94.28, CAD/CHF is up by 15 pips (+0.20%) to 0.7421

As for the euro, most pairs were range-bound and directional movement was mixed for the forex session, with EUR/USD up by only 9 pips (+0.08%) to 1.0880 despite mostly positive readings for a slew of PMI data.

The forex calendar for the upcoming afternoon London/morning U.S. session only has a few items lined up, but they’re all heavy-hitters, so ready your heart and mind because we may be meeting a lot volatility soon enough.

The first item on the list is the ADP employment survey (215K expected v.s. 237K previous), which would be released at 1:15 pm GMT. This acts as a leading indicator for the upcoming NFP report this Friday and it’s expected to show a decrease in net new jobs, so expect the Greenback to weaken if the actual reading meets or fails market expectations. And if you haven’t already, make sure to check Forex Gump’s trading guide for the upcoming NFP report, especially if you plan to trade this event.

Next, at 1:30 pm GMT, we’ll get a double treat with the simultaneous release of Canadian (-2.90B expected, -3.34B previous) and U.S. (-43.00B expected, -41.87B previous) trade data. Do note that the U.S. trade deficit is expected to widen while Canada’s trade deficit is expected to narrow, so expect some volatility from Loonie and Greenback pairs, especially USD/CAD

Finally, at 3:00 pm GMT, forex traders will get the reading for ISM’s non-manufacturing PMI (56.2 expected, 56.0 previous). ISM’s manufacturing PMI, which was released on Monday, was a disappointment to forex traders, but perhaps the non-manufacturing PMI will dispel that disappointment since it is expected to increase a bit. 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 weeks!