Article Highlights

  • U.K. Nationwide House Price Index m/m: 0.7% vs. 0.6% forecast, 1.2% previous
  • U.K. Construction PMI weaker-than-expected: 60 vs. 61 forecast, 60.8 previous
  • European Flash HICP lower: 0.5% vs. 0.6% forecast, 0.7% previous
  • European Unemployment Rate ticks lower: 11.7% vs. 11.8% forecast/previous
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The currency market picked up in movement in the morning London session, with the behavior seeming to be all about the euro on first a weak inflation read and then a better-than-expected European unemployment rate read.  It’s the latter release that’s got traders lightening up on short euro bets ahead of the highly anticipated ECB monetary policy decision this Thursday, pushing up the shared currency up strongly on the session:

EUR/USD is up 25 pips (+0.19%) to 1.3621, EUR/JPY is up 22 pips (+0.16%) to 139.38, and EUR/GBP is up 16 pips (0.20%) to .8130

Sterling also picked up in volatility after a mixed housing read and then a weaker-than-expected read on the U.K.’s economic data point of the day: Construction PMI.  Surprisingly, despite another tick lower in the data point, Sterling spiked higher on the event but was quickly faded within the hour of the data release to bring the currency near the day’s opening prices.

Finally, the currency movement of note without a major catalyst is the Swiss Franc.  The pair is up on the session, possibly on some lightening up of CHF shorts ahead of the ECB decision this week. The Franc took quite a beating in May on speculation the SNB may move to raise the EUR/CHF floor if the ECB does cut rates.

USD/CHF is down 21 pips (-0.24%) to .8963, GBP/CHF is down 26 pips (-0.17%) to 1.5013, and the big mover of the session is CAD/CHF, down 32 pips (-0.39%) to .8209

We’re coming up on an afternoon London trading session light on economic data. It won’t be until 3:00 pm GMT that we’ll get IBD Consumer Optimism and factory orders data from the U.S. The latter is probably the closer watched data point out of the two, and it’s expected to come in below the previous read (0.5% vs. 0.9% previous) to signal a decline in consumer down in May.

Also risk sentiment seems to be mixed with Asia equity markets closing mostly positive while Europe markets are down on the session. Overall, market correlations are a bit quirky today so stay safe and stay frosty!

See also:

Asia Session Recap

U.S. Session Recap

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