Asian Session Forex Recap – Mar. 12, 2015

  • RBNZ kept interest rates on hold, Wheeler jawboned as usual
  • RBNZ: Prolonged period of stability in interest rates for two years
  • Australian employment change up by 15.6K in Feb
  • Australia’s jobless rate fell from 6.4% to 6.3%
  • Japan’s tertiary industry activity up by 1.4% in Jan vs. 0.6% estimate
  • Japanese BSI manufacturing index slumped from 8.1 to 2.4 this quarter

As most forex analysts expected, the RBNZ decided to maintain its neutral stance in their latest policy statement and kept interest rates on hold. Although Governor Wheeler took the chance to jawbone their currency as always, he also pointed out that New Zealand has been growing at a faster pace compared to most of its peers and that weak inflation is no longer such a big concern.

NZD/USD bounced off the .7200 major psychological support level right after the event, with the pair enjoying a 30-pip gain (+0.42%) so far. The Kiwi chalked up a larger lead against the euro, as EUR/NZD is down 90 pips (-0.62%) after breaking below 1.4400.

Australia’s employment change report came in line with expectations of a 15.6K increase for February, but the previous month’s reading was downgraded from the initially reported 12.2K drop in hiring to show a larger 14.6K decline. The jobless rate managed to dip from 6.4% to 6.3%, but this was mostly due to a drop in labor force participation. Inflation expectations fell from 4.0% to 3.2% for February, according to the Melbourne Institute, indicating that downside pressure on price levels has increased.

AUD/USD is struggling to hold on to the .7600 major psychological handle as of this writing and is up 5 pips (+0.07%) while AUD/JPY is up by 11 pips (+0.10%). EUR/AUD is lower by 52 pips (-0.37%), as the shared currency was unstoppable in its dive this week.

Data from Japan was mixed, as the tertiary industry activity picked up by a stronger-than- expected 1.4% pace for January while the BSI manufacturing index slumped from 8.1 to 2.4 this quarter. The yen barely budged after the release, with USD/JPY up 4 pips (+0.04%) and GBP/JPY higher by 7 pips (+0.03%). Against the euro, of course, the Japanese currency is up 32 pips (+0.25%).

The forex calendar shows that a bunch of medium-tier reports are lined up from the euro zone in this upcoming London trading session, but it’s likely that the shared currency could carry on with its slide. German and French final CPI readings are due, along with the euro zone industrial production figure. The U.K. trade balance is also up for release and it might show a smaller deficit of 9.7 billion GBP compared to the previous 10.2 billion GBP shortfall.

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!