Forex trading headlines from the European morning session 19 September 2014
News:
- Scottish uprising put firmly back in the box- Final score NO = 55.30% YES = 44.70%
- Morgan Stanley say any pound pop on “No” win may stall at 1.6700
- Credit Agricole says there’s still legs in a pound rally on Scottish referendum result – Looking for 1.6600 today
- Not wanting to be left out, USD/JPY made a big move overnight to the highest in 6 years
- Scotland’s Salmond says he accepts the verdict of the people
- UK’s Cameron says he’s delighted by Scotland result
- Bumper start for European stocks as Europe breathes a sigh of relief over Scottish vote
- Everyone welcomes the outcome of the Scotland vote
- Merkel says Germany is one of the growth engines in euro area
- EU’s Herman Van Boreoff welcomes Scottish referendum result zzzzZZZ
- BOJ’s Kuroda says Japan is halfway to 2% price target
- Japan’s Suga says he wants to push ahead with Abenomics policies
Data:
- July 2014 Japan All industry activity index-0.2% vs 0.0% exp m/m
- July 2014 Japan Leading index final 105.4 vs 106.5 prior
- August 2014 Japan nationwide department store sales -0.3% vs -2.5% prior
- August 2014 German PPI -0.1% vs -0.1% exp m/m
- Q2 2014 French wages final 0.4% vs 0.4% prior q/q
- July 2014 eurozone current account NSA 32.3bn vs 20.8bn prior
Scotland vote fever reached its crescendo last night as all eyes turned north of England and whether we’d be tippex-ing out parts of the union jack today. Early nerves were soothed as the first vote came out a No. It was followed by more no’s which saw cable lifted through 1.6500 from around 1.6420. By the time the first yes vote came out the pound wasn’t interested and didn’t even flinch as heavy weight Glasgow voted yes to independence. A resounding No to independence won out by 29-4 and that should keep the jocks quiet for a couple of years.
As the results came in cable sat tight and looked to be suffering vote fatigue. This was to prove the case as when the show was over we we’re no further up than the 1.6525 high and mooching around the 1.6500 level. The market had lost it’s fear in the two days leading up to the vote and had nothing more to take. My breath was held for the London open to see what the UK traders made of waking up to peace and harmony and the lack of a secondary follow through told the whole story. If it wasn’t going to jump again in the early European day there was only going to be one result.
Down we came through 1.6400 after a bit of flapping around at 1.6430/70 to a low of 1.6354 where support held out and the buyers came in. The upside might no be dead yet but it hasn’t taken long to wash most of the Scottish trade out. Next week we’ll be back to BOE and data watching
USD/JPY felt left out of all the attention so decided to take itself off through 109 to the highest Sep 2008. The Nikkei played a big part rising to the highest in 7 years but a strong resistance line from 2002 capped the currency move. 109.00 looked strong on the move back down but finally went late mid session to former resistance at 108.80. Bounces so far have amounted to about 14 pips. The big tech played its part, we’ve been on a strong run, and the chances of a dose of consolidation have increased. Let’s see what the US makes of the moves.
EURUSD has been largely on the back foot and is posting session lows of 1.2861 as I type
Pretty much everything else bar pound pairs kicked back and watched the show but stocks have seen good gains on a relief trade that the UK hasn’t stepped back in time by 5000 years.
I’m finally off to get some shut eye and I hope you made tons of ticks over the vote and make many more in the hours ahead. I hope you all have a great weekend
