- European Current Account lower: 19.5B EUR vs. 21.6B EUR previous
Price action was mostly subdued during the morning London session, relative to a much more active Asia session that didn’t have a chance to price in the fresh news of the Malaysian Airline tragedy in Ukraine and the movement of Israeli troops into Gaza. After the initial opening spike in Europe, most of the major pairs chopped around 10 – 20 pip ranges since then. It looks like forex traders are still watching and waiting for further developments before making moves, especially ahead of the rapidly approaching weekend.
We did see one economic release from Europe in the form of Current Account data, which added to the string of disappointing reads from Europe in the past month. The euro did see selling pressure after the release, but again volatility was very limited. The EUR/USD currently remains unchanged on the session around 1.3523.
The forex calendar for the final afternoon U.K./morning U.S. trading session is light, but has data from both Canada and the U.S. that can provide short-term volatility. At 1:30 pm GMT, we’ll get a read on Canadian inflation in the form of consumer price inflation data. The forecasts are for inflation to tick lower from last month’s surprising spike higher, after which the reaction was heavily in favor of the Loonie through the end of the July. Another surprise in either direction could lead to similar momentum behavior, especially if we see a step back to low reads.
Starting at 2:55 pm GMT, we’ll first get the preliminary University of Michigan Sentiment survey, forecasted to come in at 83 vs. 82.5 previously. Five minutes later at 3:00 pm GMT, we’ll get the Conference Board’s Leading Index data, a forward looking index based on several economic indicators. The UoM Sentiment number is the event to watch out for as it can give us a glimpse on U.S. consumer sentiment and future spending, which has been ticking lower since April.
Finally, geopolitical news will continue to dominate traders’ focus as the stories from both the Israeli-Gaza conflict and Malaysian Airlines tragedy remains fluid. Stay frosty with those safe haven trades because anything can happen in these situations, and they can happen very fast! Good luck!
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