Tuesday’s London Session has brought a return to calmer market conditions relative to the past few days. Market participants have seen a nervous consolidation of recent currency moves within wide ranges and choppy trading. Volume is relatively light as the market takes a well-deserved breather before the next move. Economic data was heavy in the London morning, highlighted by another round of UK inflation data via the Consumer Price Index. In short, the story is the lack of Carry Trade selling as has been seen throughout the past week.

Today’s range bound pause in the recent trend is still providing ample opportunities for market players. Heightened volatility is causing currency pair spans to be quite substantial, favoring short-term traders rather than long-term investors. The market continues to key off of the Carry Trade pairs, most notably EURJPY. While the cross showed a robust 100+ pips amplitude over the past several hours, it has failed to cover meaningful ground to either the side of 160.00 or 161.00. EURUSD slid to the downside, south of 1.4580, while USDJPY sprinted back over 110.00 within a mixed US dollar trade. AUDUSD continued its bounce from yesterday’s lows, outperforming the market on a percentage basis. Conversely, USDCAD gave back a portion of gains after finding sellers at 0.9620.

New York Session traders will continue to watch inter-market relationships to maximize information in order to better predict the futures path of the FX market. US equity futures are currently trading higher, in-line with the positive movement in the Carry Trade. Crude oil futures remain offered, though it continues to trade above $90/barrel. Gold will be on the radar following the substantial losses seen over the past 24 hours. Lastly, the NY economic agenda is very light.

  

Upcoming Economic Data Releases (New York Session)

  • 1000 EDT US Nov IBD Economic Optimism, consensus: 47.0 (relevance: low)
  • 1400 EDT US Oct Monthly Budget Statement, consensus: -$59.0B (relevance: low)
  • 1500 EDT US Sept Pending Home Sales MoM, consensus: -2.5% (relevance: low)