Asian Session Forex Recap – June 16, 2015

  • RBA minutes: Monetary policy to remain accommodative
  • RBA minutes: AUD needs to fall further
  • Australia’s new motor vehicle sales down 1.3% in May
  • BOJ Gov Kuroda: Didn’t meant to influence forex rates last week
  • U.K. headline and core CPI, German ZEW, Swiss SECO estimates due today

Forex traders turned their attention to the highly-anticipated release of the RBA monetary policy meeting minutes in today’s Asian session, but the Aussie barely budged after the transcript hit the newswires. After all, the minutes didn’t contain anything we haven’t heard before, as policymakers simply agreed to keep policy accommodative and emphasized that the Aussie needs to depreciate further.

AUD/USD is still hovering around the .7760 area and is down 3 pips (-0.03%), AUD/JPY is up 10 pips to 95.92 (+0.11%), EUR/AUD is up 5 pips around 1.4530 (+0.05%), and GBP/AUD is higher by 26 pips (+0.13%).

Yen pairs are in recovery mode after BOJ Governor Kuroda clarified that he didn’t mean to influence the currency’s trading levels last week when he spoke of real effective exchange rates. Recall that he said something about the yen being able to correct its excessive gains over the past years and that it is sufficiently weak already, triggering a massive selloff among yen pairs. Oops!

USD/JPY popped up to a high of 123.78 after Kuroda’s remarks and is up 18 pips (+0.13%) so far, EUR/JPY advanced by 22 pips (+0.16%) to the 139.40 area, and GBP/JPY is higher by 44 pips (+0.23%) and is closing in on 193.00.

Can the British pound hold on to its recent gains? The forex calendar shows that the U.K. is set to print its May CPI readings in today’s London trading session, with headline inflation projected to show a 0.1% rebound from the previous 0.1% dip and core inflation expected to climb back to 1.0%. Stronger than expected data could remind traders that the BOE’s next monetary policy move is still likely to be a rate hike, allowing the pound to extend its rallies. On the other hand, another set of disappointments could lead to a pound selloff.

Also lined up today is the release of the German ZEW economic sentiment index, which is slated to fall from 41.9 to 37.5 and indicate a decline in optimism. As for the euro region, the ZEW index is projected to drop from 61.2 to 60.3, with the possibility of seeing much weaker than expected results due to the ongoing Greek debt impasse.

Lastly, keep an eye out for the release of Switzerland’s SECO economic forecasts which might push franc pairs around. Just yesterday, the Swiss economy showed some improvements in its PPI and retail sales data, which implies that things might be getting better.

U.S. Session Recap

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