London Session Recap – March 26, 2014

  • German GFK Consumer Sentiment inline with expectations and previous at 8.5
  • Switzerland UBS Consumption Indicator: 1.57 vs. 1.49 previous
  • U.S. Durable Goods mixed: headline 2.2% vs. 0.8% forecast; ex transport 0.2% vs. 0.3% forecast

Despite a very light economic calendar, forex traders were on the move with big moves, mainly in the Aussie.

Early in Wednesday’s session, RBA Governor Stevens commented that there are signs domestic consumption is increasing and that the economy may continue to strengthen. This added fuel to positive Aussie momentum sentiment, sparked earlier this month on rhetoric that rate cuts from the RBA will most likely be on hold for now.  As a result, the Australian dollar is getting love from currency traders all over, up big against the majors on the session

AUD/JPY is up 93 pips (+0.99%) to 94.63, AUD/USD is up 77 pips (+0.84%) to .9240, and EUR/AUD is down 151 pips (-1.01%) to 1.4928.  This is having a broad bullish effect on the commodity dollars as the Kiwi and Loonie are also seeing broad strength on the session.

The euro is also on the move to the downside after continues rhetoric yesterday that the ECB is ready to increase accommodative monetary policy if necessary.  This means that negative rates speculation is still on the table for forex traders and the euro is paying for it: EUR/JPY is down 7 pips (-0.06%) to 141.23, EUR/USD is down 33 pips (-0.24%) to 1.3792, and EUR/CAD is down 41 pips (-0.27%) to 1.5395.

We just got U.S. durable goods numbers coming in mostly positive, adding on to the argument that the U.S. economy is recovering. The reaction in the Greenback was mostly bullish, but quickly faded in most pairs back to pre-release levels.  With the rest of the U.S. session lacking in data, this should provide a bit of support for risk-on flows into the European close, especially as Asia markets closed positive (Nikkei +0.37%, Hang Seng +0.72%) and European markets up on the session (FTSE 100 +0.50%).  But of course, stay on your toes–even though the focus has shifted a bit away, geopolitical risks still lurk in the background!

See also:

Asian 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 setups!