EURUSD And GBPUSD Recovers Ground Intraday

Key Highlights

• Euro and British pound managed to gain ground against the US dollar as buyers appeared.

• Switzerland Trade Balance released by the Federal Customs Administration posted a trade surplus of 1,515M, compared with the previous revised reading of 3,795M in December 2014.

• Spanish Unemployment Survey released by the Spanish Government came in at 78.0K, whereas the market was expecting a reading of 83.4K in January 2015.

• UK PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics increased from the last reading of 57.6 to 59.1 in January 2015.

• Euro Zone Producer Price Index (PPI) released by the Eurostat declined by 2.7% in December 2014, compared with same month of the last year.

• Italian Consumer Price Index released by the Istat declined by 0.6% in January 2015, compared with the last reading of 0%.

• Canadian Industrial Product Price released by the Statistics Canada declined by 1.6% in December 2014 whereas the last reading was also revised to -0.5%.

• Canadian Raw Material Price Index released by the Statistics Canada came in at -7.6%, up from the last revised reading of -5.7% in December 2014.

• EURUSD looks like moving higher with buyers gaining control in the near term.

US Personal Income

Earlier during the NY session, the Canadian Industrial Product Price was released by the Statistics Canada. The forecast was slated for a decline of 0.5% in December 2014, compared with the preceding month. However, the outcome was a bit lower as the Canadian Industrial Product Price declined by 1.6% more than the forecast and impacted the USDCAD pair.

London Session Recap

The UK PMI Construction released by the Chartered Institute of Purchasing & Supply and Markit Economics was the highlight of the London session. The market was expecting it to decrease from the last reading of 57.6 to 57.0. However, the result was on the positive side, as the UK PMI Construction managed to post a reading of 59.1 in January 2015. The report mentioned that the output and new business growth managed to rebound well from the lows seen in December. There was a surprise improvement in new work, as it posted the fastest gain for three months. In the report, David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply mentioned that “after the disappointing end to last year and the drop in the industry’s fortunes, the construction sector has had a perky start with good activity across all sectors”. This was encouraging and somehow helped the British pound in the near term.

In the Euro Zone, the Producer Price Index (PPI) released by the Eurostat declined by 1% in December 2014, which was more than the preceding month’s decline of 0.3%. The forecast was slated for a decline of 0.7%.

Technically, the EURUSD pair bounced sharply during the London session. It even managed to clear the 1.1400 resistance area. The Euro buyers were aggressive as sellers stepped aside for a short covering in the EURUSD pair.

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