London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Sep 09 08 11:44 GMT |

Euro recovered against the greenback in London trading, helped in part by news that a major US pharmaceutical company is making a bid to buy Germany’s largest drug maker. EUR/USD opened the session near the intraday lows around 1.4085 and jumped nearly 100 pips in the session towards a close around the 1.4780 mark. The pair made multiple tries above 1.4200 but failed. This level looks to be a pivotal trigger for further upside.

Cable jumped more than 100 pips despite disappointing economic data out of the UK. Industrial production tumbled -0.4%in July and this took the annual run-rate to a dismal -1.9% from -1.7% previously. Weakness in the buck, however, helped GBP/USD rally towards a close near the 1.7650 area.

The buck did manage to extend gains against the yen. The good performance in European stocks, which are up about 0.7% thus far, coupled with US futures pointing to a strong market open in NY helped JPY crosses higher. USD/JPY opened the session near 107.35 and was sitting around the 108.10 mark at the close. EUR/JPY did not disappoint from a volatility standpoint and jumped 200 pips in London trading towards the 153.25 area.

No top-tier data due up out of the US today, but the lower-level indicators could still be market moving. Pending home sales are due up at 1400GMT and given that they are such a good indicator of future existing home sales activity they are likely to be closely watched. The consensus is for a -1.5% decline in July after a 5.3% jump the prior month. A tepid number here would suggest that the home sales market continues to tread water, but is not necessarily worsening. Fed Chairman Bernanke is due to speak at 1300GMT but the topic is education and there will be no Q&A session, so unlikely market moving.

Upcoming Economic Data Releases (NY Session) Prior Estimate

* 9/9 12:15 GMT CA Housing Starts AUG 186.5K 190.0K
* 9/9 13:00 GMT US Bernanke Speaks on Education in Washington 9-Sep
* 9/9 14:00 GMT US Pending Home Sales MoM JUL 5.30% -1.40%
* 9/9 14:00 GMT US IBD/TIPP Economic Optimism SEP 42.8 44
* 9/9 14:00 GMT US Wholesale Inventories JUL 1.10% 0.60%
* 9/9 21:00 GMT US ABC Consumer Confidence 7-Sep -47 - -

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