- Japanese Leading Indicator (Final): 101.6 vs. 101.4 previous
- Swiss UBS Consumption Indicator Index: 1.5 vs. 1.56 previous
- French INSEE Consumer Confidence Index: 96 vs. 95 forecast, 96 previous
- U.K. BBA Mortgage Approvals: 45.4K vs. 44.5K forecast, 44.49 previous
Solid trending price action in today’s morning London forex session with one-sided moves throughout the majors, and little give back as we approach the U.S. open.
European Central Bank potential easing plans were the highlight of the session as policy makers discuss easing options (more debt purchasing or charges on cash hoarders) ahead of next week’s monetary policy meeting. With around twenty different potential easing measures, there seems to be no doubt among forex traders whether or not we’ll see easing, but the question is which options can be a solid compromise for an economy as diverse in strength as the euro zone.
Risk aversion subsides as Russia-Turkey tensions ease. The markets quickly went into safe haven mode earlier this week after news Turkey downed a Russian warplane, but with Turkey’s Erdogan trying to ease tensions with Russia and Russian Foreign Minister Sergei Lavrov saying they do not intend to wage war against Turkey, it looks like traders are taking a step back into risk assets. European equities are up on the session (FTSE 100 +58.55 or 0.93% and DAX +167.79 or +1.53%), and U.S. futures are slightly higher +4.80 or +0.23% ahead of U.S. trade.
Major Currency Movers:
USD – Strong upside move against all of the majors right from the London open, likely on European traders getting the chance to price in the minutes released earlier from this week’s unscheduled Fed meeting. It makes sense for forex traders to go long the Greenback given that we saw eight voting members in favor of an increase of the deposit rates.
USD/JPY went from around 122.30 at the London open to move up 0.39% to 122.71 before running out of steam. USD/CHF rallied up 82 pips (0.81%) from 1.0150 to 1.0230 before finding an intraday top.
CAD – The comdolls were all in an upswing as well throughout London trade with the Loonie leading the way. This is likely on broad risk-on flows as evidenced by the gains in European equities and U.S. futures, as well as a recent bounce in the price of crude oil this week after the initial reaction to the fresh Russia-Turkey tensions on the downed Russia warplane.
EUR/CAD was a big downside mover with the help of broad euro weakness, opening up London trade around 1.4200 before dropping almost 1% to as low as 1.4080 on the session.
EUR – It was steady bleeding all session long for the euro, especially against the broad strength of the Greenback with EUR/USD falling from 1.0680 to a session low of 1.0580, a near -1.00% move. We saw similar moves again Sterling (EUR/GBP went from .7080 to .7020) and the Japanese yen (EUR/JPY went from a session high 130.76 to 129.77 for a 0.75% drop).
- 1:30 pm GMT U.S. Personal Income (0.4% forecast vs. 0.1% previous)
- 1:30 pm GMT U.S. Personal Spending (0.3% forecast vs. 0.1% previous)
- 1:30 pm GMT U.S. Core Durable Goods (0.3% forecast vs. -0.4% previous); headline Durable Goods (1.7% forecast vs. -1.2% previous)
- 2:00 pm GMT FHFA House Price Index (0.4% forecast vs. 0.3% previous)
- 3:00 pm GMT University of Michigan Sentiment Index (93.1 forecast/previous)
- 3:00 pm GMT U.S. New Home Sales (0.5% forecast vs. 0.47% previous)
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