London Session Recap

Daily Forex Fundamentals | Written by Forex.com | Aug 25 09 12:17 GMT |

The pendulum of risk continues to swing and late London trading saw optimism return. Economic data was nothing to write home about and the only noteworthy release was the final cut of German GDP. The number came in bang-on expectations, rising 0.3% in the quarter. Nonetheless, equity marts in Europe managed to press back to flat after being down more than -1% in some parts. US futures are now firmly in the green as we write. The price action in currencies looks flow driven rather than news driven and talk that a large European bank was a good buyer of EUR/CHF got the ball rolling ahead of the NY open. EUR/USD has recovered all the way back from a 1.4253 low to trade near the 1.4330/40 highs currently. Stops are seemingly building above 1.4340/50 so we would expect some decent short-term resistance into this zone. The yen crosses have recovered in obvious fashion and EUR/JPY has rallied from a 133.96 low back towards the 134.80 area. USD/JPY remains more of a mixed bag and trades just 20 pips above its intraday 93.79 low. The shift back to risk has seen the commodity complex recover as well. Oil is comfortably back above $74 and this saw AUD/USD test the air above 0.8400 briefly while USD/CAD continues to flirt with 1.0750 support here. Looking ahead to NY trading, we have a few important economic events. Fed Chairman Bernanke is set to be reappointed by President Obama shortly after 9am ET and while this is baked in the cake, it will remove some uncertainty from the marketplace. On the data front, we have Case-Shiller home prices for the US at 900am ET and the Conference Board consumer confidence index at 1000am ET. Consumer confidence is the more forward looking of the two and thus will be closely watched. Should the number print above the expected 47.9 for August, look for the rally in risk to extend. Upcoming Economic Data Releases (NY Session) prior expected 8/25 13:00 GMT US S&P/CaseShiller Home Price Ind JUN 139.84 - - 8/25 14:00 GMT US Consumer Confidence AUG 46.6 47.6 8/25 14:00 GMT US Richmond Fed Manufact. Index AUG 14 16 8/25 14:00 GMT US House Price Index MoM JUN 0.90% 0.40% 8/25 15:15 GMT SZ SNB Governing Board Member Thomas Jordan Makes Speech 25-Aug 8/25 16:15 GMT CA Bank of Canada Deputy Governor Tim Lane Speaks in Kingston 25-Aug 8/25 16:15 GMT UK Bank of England's Bean to Make Speech 25-Aug 8/25 21:00 GMT US ABC Consumer Confidence 23-Aug -46 Forex.com http://www.forex.com DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.