Asian Session Forex Recap – Feb. 19, 2015

  • Liquidity lower on Chinese New Year holidays
  • Japanese trade deficit smaller than expected at 0.41T JPY vs. 0.95T JPY estimate
  • Japan’s Finance Minister Amari suggested lower corporate tax rate
  • ECB monetary policy meeting minutes up for release

Even though most Asian session traders are off enjoying the Chinese New Year holiday, major forex pairs made a few good moves in reaction to the recently released FOMC meeting minutes. USD/JPY is grinding lower and testing the 118.50 support area (-0.09%) while EUR/USD is up nearly 20 pips (+0.15%) around 1.1415.

The Japanese yen drew a bit of support from the stronger than expected trade balance, which indicated a smaller deficit of 0.41 trillion JPY versus the estimated 0.95 trillion JPY shortfall. Components of the report showed a healthy 17% gain in exports, supporting the BOJ’s claim that output growth is picking up pace. GBP/JPY is is down 6 pips (-0.04%) and is starting to drift sideways while AUD/JPY is lower by 25 pips (-0.27%) so far.

Japan’s Finance Minister Amari’s comments also gave the currency a boost when he suggested that the corporate tax rate should be lowered in order to spur spending. He also said that the yen’s current level is already appropriate and that it could continue to support exports.

Forex traders might turn their attention to the euro in the next few hours, as the ECB is set to print the minutes of its latest policy meeting (1:30 pm GMT) for the very first time. This should shed more light on their decision to implement quantitative easing and whether or not more stimulus is to be expected. Market watchers might also see what ECB officials think of the debt fiasco in Greece and how they expect this to affect the region’s financial standing. Better watch those euro trades closely if you’ve got any!

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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