Asian Session Recap – Aug. 20, 2014

  • RBA Governor Stevens attempted to jawbone AUD
  • Australia’s MI leading index down by 0.1%
  • Japanese trade deficit narrowed from 1.07T JPY to 1.02T JPY
  • Japanese all industries activity index down by 0.4% vs. expected 0.2% dip
  • BOE minutes to rock pound pairs in London trading

Looks like the Greenback ain’t done with its rallies! After a bit of consolidation during the start of the Asian trading session, the dollar continued to advance against its major forex counterparts. EUR/USD slid from the 1.3320 area to a low of 1.3302 while GBP/USD tumbled closer to the 1.6600 major psychological level.

AUD/USD also had its share of losses, with NZD/USD following in its footsteps, as RBA Governor Stevens attempted to talk down the Australian dollar in his testimony. He mentioned that the “risk of AUD falling is underappreciated” but he also pointed out that intervention might not be useful for now. He also said that he is surprised that the U.S. dollar is not trading higher, given the recent improvements in the U.S. economy.

Over in Japan, the trade balance showed weaker than expected results as it printed a deficit of 1.02 trillion JPY, larger than the estimated 0.97 trillion JPY shortfall. Nonetheless, this is an improvement from the previous 1.07 trillion JPY trade deficit, as exports marked a 3.9% gain. The all industries activity index marked a 0.4% decline versus the estimated 0.2% dip, leading to yen weakness across the forex charts.

USD/JPY staged a strong rally past the 103.00 handle and peaked at 103.21 as of this writing. EUR/JPY is up more than 30 pips while GBP/JPY was able to chalk up roughly 35 pips in gains for the past few hours.

In the upcoming London trading session, all eyes and ears will be on the release of the BOE monetary policy meeting minutes, which might shed more light on why policymakers are less inclined to hike rates before the end of the year. Dovish remarks could lead to more losses for the pound, especially if BOE officials zoom in on the potential drag of economic slack.

See also:

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. Some things just go well together.

In forex trading, you get better odds at securing pips when your fundamental analysis is complemented by technical analysis. Head on to Big Pippin’s Daily Chart Art for some pip-locking technical setups!