Article Highlights

  • German Retail Sales m/m improves: 2.5% vs. 0.5% forecast, -1.1% previous
  • German Unemployment Rate inline with 6.7% forecast/previous; Unemployment Change higher to 12K vs. -2K forecast, 3K previous
  • U.K. Nationwide House Prices (sa) m/m declines: -0.2% vs. 0.5% forecast, 0.8% previous
  • Swiss KOF Leading Indicator ticks above expectations: 99.1 vs. 99 forecast, 99.6 previous
  • U.K. GDP (3rd est.) q/q ticks higher: 0.9% vs. 0.8% forecast/previous
  • European Flash HICP core y/y ticks lower to 0.7% vs. 0.9% forecast/previous
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The morning London session was jam packed with economic data, but the forex news of the morning is another big gain for the U.S. Dollar.

The U.S. Dollar index jumped from around 85.50 to 86.20 this morning, a 0.83% move which is a pretty big intraday move for currencies. There wasn’t a direct catalyst at the London open for the buying spree other than the strong demand that has been going on for the Greenback since August. The euro and the franc are probably taking the biggest hits against the dollar on the session, and momentum doesn’t seem to be slowing down for the broad gains in the buck:

EUR/USD is down 102 pips (-0.81%) to 1.2581, USD/CHF is up 75 pips (+0.80%) to .9586

The euro is not only down against the U.S. dollar, but taking a broad hit as forex traders are probably focusing on another weak inflation read from the core CPI flash estimate.  Inflation still looks to be declining despite easing monetary policy actions by the ECB this year, heightening fears of a deflationary scenario.  The momentum in the euro selloff is still going strong into the U.S. trading session:

EUR/JPY is down 74 pips (-0.54%) to 138.12, EUR/GBP is down 32 pips (-0.41%) to .7776, and EUR/CAD is down 100 pips (-0.71%) to 1.4058

And the British pound is also taking a broad hit on the session (with exception against the euro and the franc) despite growth data being revised higher earlier.  The weakness may be coming from the current account data, which showed the deficit growing to -23.1B vs. -17.5B forecast. The currency weakness isn’t as bad as what we’re seeing priced into the euro, but the momentum still seems to be to the downside for Sterling:

GBP/USD is down 53 pips (-0.33%) to 1.6186, GBP/JPY is down 14 pips (-0.08%) to 177.67, and GBP/CAD is down 48 pips (-0.27%) to 1.8079

The forex calendar for the Tuesday afternoon London/morning U.S. session is pretty busy in its own right with a healthy mix of U.S. and Canadian economic data.

At 1:30 pm GMT, we’ll get all of the Canadian economic data including the industrial product and raw materials price indexes, and most notably the monthly GDP numbers.  The forecast for the Canadian GDP number is to stay in line with the previous read at 0.3%, which is inline with the positive trend higher throughout 2014.

The U.S. data will start trickling in starting at 2:00 pm GMT with the S&P Case-Shiller Home Price index (7.4% forecast vs. 8.07% previous) for a new read on the housing sector.   Within the hour, we’ll then get the Chicago PMI number (62 forecast vs. 64.3 previous) at 2:45 pm GMT for a read on manufacturing, and to close out the economic calendar for the session, the U.S. consumer confidence number will come out at 3:00 pm GMT. The consumer confidence number has the most market move potential out of the three data points, and it’s forecasted to tick higher to 92.5 vs. 92.4 previous.

See also:

Asia Session Recap

U.S. Session Recap

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