Asian Session Forex Recap – July 2, 2015

  • New Zealand dairy auction reported 5.9% decline in prices
  • New Zealand ANZ commodity prices down 3.1% in June
  • Australia’s trade deficit at 2.75B AUD vs. 2.21B AUD forecast in May
  • Australia’s April trade balance downgraded from -3.89B AUD to -4.14B AUD
  • U.K. construction PMI, Spanish employment change due
  • ECB minutes up for release today

If there’s anything more heartbreaking than news of Ben Affleck and Jennifer Garner splitting up, it’s the latest set of reports from Australia and New Zealand that had some forex junkies buzzing about potential interest rate cuts.

This week’s Global Dairy Trade auction logged in a 5.9% decline in prices, following the previous auction’s 1.3% drop and carrying on with the continuous tumble in dairy prices since mid-March. To top it off, ANZ reported a 3.1% decline in New Zealand’s commodity prices for June while the previous month’s reading was downgraded to show an even larger decline of 4.9%.

In the Land Down Under, the trade deficit came in at 2.75 billion AUD in May, larger than the projected 2.21 billion AUD shortfall. Even worse, the previous month’s trade balance suffered a nasty downgrade from -3.89 billion AUD to -4.14 billion AUD, indicating that trade activity was weaker than initially reported.

NZD/USD resumed its selloff and is down 24 pips (-0.35%), trying to see if support at the .6700 handle would break. AUD/USD dipped to a low of .7627 after the trade figures were released but has recovered to the .7650 area (+0.09%). AUD/JPY is up 23 pips (+0.25%), NZD/JPY is down 17 pips (-0.20%), and AUD/NZD is up 62 pips (+0.55%).

Up ahead, forex traders could turn their attention to the upcoming U.K. construction PMI release (8:30 am GMT) and the Spanish employment change report (7:00 am GMT). Analysts are expecting to see an increase from 55.9 to 56.6 in the U.K. construction PMI, which would reflect a stronger pace of industry expansion and possibly give the pound a boost. Meanwhile, Spain could show a 124.3K drop in joblessness, better than the previous 118K decline.

The release of the ECB monetary policy meeting accounts (Yes, they’ve been releasing their meeting minutes lately!) could also mean additional forex volatility for euro pairs, although this contains the transcript of their discussions from a month ago. Nonetheless, any mention of the central bank’s plan of action for Greece could trigger strong moves for the shared currency.

In the absence of any market-moving cues, be ready for potential consolidation ahead of today’s NFP release in the U.S. trading session. Make sure you check out my buddy Forex Gump’s Trading Guide for this news event!

 

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!