London Session Forex Recap – Sept. 19, 2016

  • Euro Zone current account: €21.0B vs. €27.2B expected, €29.5B previous

The forex calendar for today’s morning London session was pretty bare, so currency traders turned mainly to risk sentiment and commodities for direction. The main mover was marching to the tune of its own drummer, though.

Major Events/Reports:

Commodities climb higherCommodities extended their gains during the morning London session.

Oil benchmarks were charging higher:

  • U.S. WTI crude oil was up by 1.33% to $44.20 per barrel.
  • Brent blend crude oil was up by 1.20% to $46.34 per barrel.

Base metals were more mixed, but generally higher:

  • Nickel was up by 2.49% to $9,972.50 per dry metric ton.
  • Tin was up by 1.19% to $19,320.00 per dry metric ton.

Precious metals just shrugged off the prevalence of risk appetite:

  • Gold was up by 0.58% to $1,317.85 per troy ounce.
  • Silver was up by 1.68% to $19.178 per troy ounce.

The broad-based commodities rally was due to the Greenback’s recent weakness, according to market analysts. Of course, there were also other factors in play for each specific commodity. Some market analysts, for example, are saying that today’s oil rally was due to supply disruptions in Libya while other market analysts cited Venezuela’s statement that an oil freeze deal may be hammered out.

Risk-taking continues – The risk-on mood that started in Asia carried over into the first morning London session of the week, with most of the major European equity indices printing gains.

  • The pan-European FTSEurofirst 300 was up by 0.99% to 1,341.86
  • The blue-chip Euro Stoxx 50 was up by 1.24% to 2,970.00
  • The U.K.’s FTSE 100 was up by 1.45% to 6,807.30
  • The DAX was up by 0.77% to 10,355.00

U.S. equity futures were also well supported, implying that the risk-friendly environment may carry over into the upcoming U.S. session.

  • S&P 500 futures were up by 0.44% to 2,141.88
  • Nasdaq futures were up by 0.33% to 4,830.12

Market analysts were attributing the risk-on vibes to bargain buying of banking stocks after selling off last Friday, as well as demand for energy companies, thanks to the rally in oil prices.

Major Market Movers:

CHF – The Greenback was still relatively weak during the morning London session. However, it finally had enough and decided to switch places with the safe-haven Swissy. The Swissy therefore ended up getting its butt kicked during the session, as demand for the safe-haven currency evaporated due to the persistent risk-on vibes. Other than the risk sentiment, there wasn’t really any major catalyst for the Swissy’s weakness.

USD/CHF was up by 13 pips (+0.14%) to 0.9812, EUR/CHF was up by 17 pips (+0.16%) to 1.0953, GBP/CHF was up by 16 pips (+0.13%) to 1.2805

AUD – The risk-friendly environment and the commodities rally gave the comdolls a boost, with the Aussie being particularly in demand. The Aussie wasn’t the top dog of the session, though.

AUD/USD was up by 14 pips (+0.20%) to 0.7547, AUD/CAD was up by 17 pips (+0.17%) to 0.9930, AUD/CHF was up by 25 pips (+0.33%) to 0.7406

JPY – Despite the prevalence of risk appetite, the Japanese yen ended up as the one currency to rule them all. Market analysts attributed this wonky price action to expectations that any action by BOJ officials in this week’s BOJ statement won’t be enough to satisfy the markets or scare off yen bulls.

USD/JPY was down by 31 pips (-0.30%) to 101.83, EUR/JPY was down by 32 pips (-0.28%) to 113.66, CHF/JPY was down by 46 pips (-0.44%) to 103.76

Watch Out For:

  • 2:00 pm GMT: U.S. NAHB housing market index (steady at 60 expected)
  • 2:30 pm GMT: CB’s Australian leading index (0.1% previous)

See also:

Asian Session Forex Recap

Last Week’s Top Forex Movers

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!