- French industrial production down by 1.7% vs. estimated 0.5% gain
- French CPI printed flat reading instead of 0.2% consensus
- Italian industrial production down by 1.2% vs. projected 0.6% uptick
- U.K. trade deficit wider than expected at 9.2 billion GBP
- BOE kept monetary policy unchanged as expected
Euro and pound pairs saw a lot of action in today’s London trading session, as a round of bleak medium-tier reports weighed on both European currencies. France reported a 1.7% drop in industrial production instead of showing the estimated 0.5% gain while Italy printed a 1.2% decline in the same report versus showing the projected 0.6% uptick. French CPI also disappointed, as it stayed flat instead of showing the 0.2% consensus.
The U.K. printed a wider than expected trade deficit of 9.2 billion GBP versus the projected 9.0 billion GBP shortfall. This was also weaker compared to the previous 8.8 billion GBP trade deficit, indicating that export activity slowed down in May. Meanwhile, the BOE kept interest rates and asset purchases unchanged as expected, and did very little to support the pound against its forex counterparts.
GBP/USD has retreated back to the 1.7100 handle while EUR/USD has encountered resistance at 1.3650 and has since pulled back to a low of 1.3596 as of this writing. Against the Aussie, which also suffered a bout of weakness in today’s Asian trading hours, the euro managed to hold on to some of its recent wins with EUR/AUD holding steady around 1.4530. The Swiss franc appears to be following the euro’s footsteps in retreating, as USD/CHF has bounced off by more than 20 pips from .8900 in the past few hours.
Volatility could be subdued in the U.S. session, thanks to the lack of major reports on tap. Only the U.S. initial jobless claims and Canadian NHPI (new housing price index) are lined up among the economic releases, but do stay on your toes during FOMC official Fischer’s testimony since this could spark significant moves among dollar pairs.
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!