Article Highlights

  • German Retail Sales m/m: -0.4% vs. -0.2% forecast, 0.0% previous
  • Swiss KOF Leading Indicator: 97.9 vs. 100.2 forecast, 100.4 previous
  • U.K.  M4 Money Supply: 0.6% vs. -1.0% previous
  • U.K. Net Consumer Credit: £1.2B vs. £1.3B forecast/previous
  • U.K. Mortgage Approvals: 69.6K vs. 69.9K forecast, 69.0K previous
  • German HICP (Prelim) m/m: 0.1% vs. 0.1% forecast, 0.0% previous
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Forex volatility remains low but picked up slightly in the morning London session thanks to a heavy economic calendar and comdoll strength.

Major Events:

Relative to the major events over the past few weeks, this week is starting off slow as we lack any major market moving headlines from the geopolitical and economic fronts.  Instead, it looks like forex traders are making small moves on this morning’s London session calendar, heavy with data from the U.K. and Europe.  It’s mostly negative for both of the major economies, supporting what could be another easing move from the European Central Bank later this week.

Overall, the reaction for European currencies has been muted as evidenced by the 15 – 20 pip range in EUR/GBP.  And it looks like traders are reacting by lifting the equity markets as another easing move supports the idea of capital moving into stocks for yield.

Forex traders did have opportunities on the session with the Aussie and Kiwi seeing strong gains, possibly on an expectation of a bounce in the upcoming Global Dairy Trade report the New Zealand dollar, continued less dovish comments from the upcoming RBA monetary policy statement, and/or the broad risk taking sentiment that we’re seeing off easy money policies from central banks.

Major Currency Movers:

AUD, NZD & JPY– the strongest gainers on the session, especially when paired with the Japanese yen, which is the weakest (as usual) as risk taking sentiment lowers the demand for safe havens.

NZD/JPY is up 66 pips (+0.83%) to 80.83 with 79.98 as session low
AUD/JPY is up 54 pips (+0.60%) to 88.84 with 88.04 as session low
AUD/NZD is down 13 pips (-0.12%) to 1.0985 with 1.1021 as session high

EUR – Weak data has put broad pressure on the euro against most of the majors:

EUR/AUD is down 55 pips (-0.39%) to 1.4661 with 1.4739 as the session high
EUR/NZD is down 96 pips (-0.59%) to 1.6104 with 1.6242 as session high
EUR/USD is down pips (-0.10%) to 1.0579 with 1.0595 as session high

GBP  – Mixed and mostly lower on the session as well after disappointing consumer data, gaining only against the safe havens:

GBP/USD is down 2 pips (-0.01%) to 1.5027 with 1.4993 as session low
GBP/NZD is down 111 pips (-0.48%) to 2.2878 with 2.3073 as session high
GBP/JPY is up 40  pips (+0.23%) to 184.96 with 184.35 as session low

Watch Out For:

  • 1:30 pm GMT Canadian Current Account: -C$15.1B forecast, -C$17.4B  previous
  • 2:45 pm GMT Chicago PMI: 54 forecast vs. 56.2 previous
  • 3:00 pm GMT Pending Home Sales  q/q: -2.6% forecast vs. 1.3% previous

See also:

Asia Session Recap

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. 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 weeks!