Asian Session Forex Recap – Feb. 16, 2015

  • New Zealand’s Q4 2014 headline retail sales up 1.7% vs. 1.3% estimate
  • New Zealand’s Q4 2014 core retail sales increased by 1.5% vs. 1.1% consensus
  • Japanese economy saw 0.6% growth in Q4, weaker than 0.9% forecast
  • Japan’s industrial production figure downgraded from 1.0% to 0.8% in Dec
  • Nikkei up by 0.51% for the day
  • Australia’s new motor vehicle sales down by 1.5% in Jan

Risk on, baby! Higher-yielding currencies continued to advance against the U.S. dollar in the past few hours, as the forex calendar contained some positive figures. Over the weekend, New Zealand released its quarterly retail sales figures and indicated a stronger than expected 1.7% gain for the headline report and a 1.5% increase for the core version.

The Kiwi was off to a running start for Monday’s Asian session, as NZD/USD gapped up from Friday’s .7430 close and is up more than 70 pips so far (+0.93%). NZD/JPY is enjoying roughly 60 pips in gains (+0.68%) while EUR/NZD is down 51 pips (-0.33%) to the 1.5200 handle.

The Aussie is also in a good mood, with AUD/USD up 39 pips (+0.51%) and AUD/JPY higher by 25 pips (+0.28%). Not even a 1.5% drop in Australia’s new motor vehicle sales for January was enough to stop the currency from joining the risk rallies, as subsiding geopolitical tensions in Russia and Ukraine seem to be keeping financial markets upbeat.

On the same note, latest GDP readings from Japan showed that the economy managed to climb out of a recession with its 0.6% growth for Q4 2014. This is weaker than the estimated 0.9% expansion while the previous quarter’s reading was downgraded to show a 0.5% contraction from the initially reported -0.4% reading.

The Japanese yen is mostly weaker across the board, as forex market watchers started buzzing about potential BOJ easing sometime this year. Apparently, components of the GDP report revealed that spending figures haven’t recovered from the sales tax hike last year. EUR/JPY is up 0.09%, GBP/JPY is up 0.16%, yet USD/JPY is down 0.12%.

The forex calendar shows that the coast is clear in terms of economic event risks for the London trading session, leaving market participants to pay close attention to the Greek debt negotiations. This standoff is keeping the euro’s gains in check for now, with any signs of progress likely to spur a relief rally. Stay tuned!

U.S. Session Recap

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

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