London Session Forex Recap – Jan. 13, 2016

  • French current account: -€1.4B vs. -€1.0B previous
  • French HICP m/m: 0.2% vs. 0.1% expected, -0.2% previous
  • French HICP y/y: 0.3% vs. 0.2% expected, 0.1% previous
  • Euro Zone industrial production m/m: -0.7% vs. -0.3% expected, 0.8% previous
  • Euro Zone industrial production y/y: 1.1% vs. 1.3% expected, 2.0% previous

The forex calendar for today’s morning London trading session was a bit on the light side, but the wonky forex price action was enough to make the trading session interesting.

Major Events:

Oil recovers, commodities broadly in the green – After diving below 12-year lows earlier, oil was back on its feet, with Brent crude oil up by 1.70% to $31.48 per barrel and U.S. crude oil up by 2.51% to $31.20 per barrel during the forex session. Market analysts pointed to the positive Chinese trade data from earlier and optimism over U.S. crude oil inventories for the surge in oil prices. Loonie pairs had mixed performance during the session, though.

Anyhow, commodities were also broadly in the green, but iron ore prices were down for the day, which helps to explain why the Aussie’s forex price action was rather subdued. Well, that or traders are waiting for Australia’s jobs report.

Oh, if you plan to trade that event, make sure to read up on Forex Gump’s Forex Trading Guide.

Another day, another equities rally – Risk-taking was still the name of the game during today’s morning London forex session, with the pan-European FTSEurofirst 300 up by 1.21% to 1,365.45 and the DAX up by 1.02% to 10,097.00. The risk-on sentiment was good for U.S. equity futures as well, with the S&P 500 futures up by 0.61% to 1,936.75 and the Nasdaq futures up by 0.70% to 4,342.75 during the forex session.

Market analysts attributed today’s steady appetite for risk to the recovery in oil prices and the positive Chinese trade data from earlier.

Major Currency Movers:

JPY – I wasn’t kidding when I said that forex price action was rather wonky since the safe-haven yen was getting some buyers despite the prevailing risk-on sentiment. Admittedly, yen pairs were mostly range-bound for most of the trading session and only began moving near the end, but there was no clear catalyst for the sudden yen demand.

USD/JPY was down by 12 pips (-0.10%) to 118.09, CHF/JPY was down by 64 pips (-0.54%) to 116.97, NZD/JPY was down by 32 pips (-0.42%) to 77.33

CHF – The Swissy was pretty weak during the forex session. This was most likely due to the risk appetite that prevailed during the session, but given how weak the Swissy was especially against the euro, I wouldn’t discount the possibility that the SNB was weakening the Swissy again.

USD/CHF was up by 45 pips (+0.45%) to 1.0100, EUR/CHF was up by 50 pips (+0.46%) to 1.0920, GBP/CHF was up by 54 pips (+0.37%) to 1.4562

GBP – As a higher-yielding currency, the pound was supposed to be getting buyers due to the risk-taking that took place during the session. Instead, pound pairs showed weakness against most of its forex rivals. There were no clear catalysts for the pound’s weakness, but it could have been due to continuing disappointment over yesterday’s disappointing industrial and manufacturing readings. It’s also possible that forex traders were opening preemptive positions ahead of tomorrow’s MPC meeting and rate decision.

GBP/USD was down by 30 pips (-0.22%) to 1.4403, GBP/JPY was down by 51 pips (-0.30%) to 170.14, GBP/CAD was down by 58 pips (-0.29%) to 2.0492

Watch Out For:

  • 3:30 pm GMT: U.S. crude oil inventories (1.9M expected, -5.1M previous)
  • 7:00 pm GMT: U.S. Federal Budget Balance (-$2.7B expected, -$64.6B previous) and Beige Book release
  • 9:45 pm GMT: New Zealand’s retail card spending: (0.5% expected, 0.3% previous)

See also:

Asian Session Forex Recap

U.S. Session Forex Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. 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!