- German Gfk Consumer Sentiment: 9.7 vs. 9.5 forecast, 9.3 previous
- Swiss Industrial Production y.y: 2.5% vs. 0.0% previous
- German Unemployment Rate inline with 6.5% forecast/previous
- German Unemployment Change: -20K vs. -10K forecast/previous
- European M3 Money Supply y/y: 4.1% vs. 3.7% forecast, 3.6% previous
- U.K. GDP (2nd Est.) q/q inline with 0.5% forecast/previous
- European Economic Sentiment: 102.1 vs. 102 forecast, 101.4 previous
The euro is lower on the session despite some mostly positive economic data from Germany, including upticks in consumer sentiment and German unemployment rate data. Without a direct catalyst for the euro turning lower, its likely that fears over the Greek drama and Ukraine fighting are still weighing in, as well as the upcoming start of the ECB’s quantitative easing program. Whatever the case may be, the euro is on a steady move lower with strong momentum:
EUR/USD is down 45 pips (-0.40%) to 1.1314, EUR/JPY is down 48 pips (-0.36%) to 134.51, and EUR/GBP is down 12 pips (-0.17%) to .7301
The euro is down big against the Kiwi, which is likely still finding strength from today’s positive New Zealand Trade balance data, and also likely on the positive risk sentiment flooding the markets as we continue into an era of central bank easy money. Because of its relatively high interest rates, the Kiwi is drawing in strong bids and strong momentum going into U.S. trade
NZD/USD is up 40 pips (+0.54%) to .7588, NZD/JPY is up 45 pips (+0.50%) to 90.19, and AUD/NZD is down 45 pips (-0.44%) to 1.0384
Finally, the Greenback just saw a big spike higher and the Loonie a drop lower, likely on traders pricing in expectations on the upcoming consumer price inflation data.
The forex calendar for the Thursday afternoon London/morning U.S. session is lined up with big time events from both the U.S. and Canada that should produce nice volatility for the Loonie and the Greenback.
At 1:30 pm GMT, we’ll get consumer price inflation data from both the U.S. (-0.6% forecast vs. -0.3% previous) and Canada (-0.4% forecast vs. -0.7% previous). Both are top tier events and inflation has been the main focus for economists and traders for a while now, so this will be a market mover, especially if we see surprises from either the expected or previous numbers.
We’ve also got durable goods orders (1.6% forecast vs. -3.3% previous) and initial jobless claims (290K forecast vs. 283K previous) data coming out from the U.S. But the likely scenario is a focus on the CPI data from both the U.S. and Canada.
And at 2:00 pm GMT, we’ll get the FHFA House Price Index data for a fresh read on the U.S. housing market. The forecast is for 0.5% increase in prices vs. 0.8% increase previous. If we do see 0.5% or lower, it would be a step back in the current trend higher, which could shake price action for the Greenback going into the London session close. Stay frosty!
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