Asian Session Forex Recap – July 15, 2015

  • Chinese economy expanded by 7.0% in Q2 2015 as expected
  • China’s industrial production increased from 6.1% to 6.8% y/y in June
  • Chinese retail sales up by 10.6% y/y in June vs. 10.2% consensus
  • Chinese fixed asset investment up by 11.4% y/y in June
  • Australian Westpac consumer sentiment index down by 3.2%, -6.9% previous
  • Australia’s new motor vehicle sales picked up by 3.8% in June
  • BOJ kept monetary policy unchanged as expected
  • Nikkei up by 0.38% for the day
  • U.K. claimant count change data due today

Surf’s up, mates! Aussie forex pairs caught a strong bullish wave today, thanks to improvements in Australia’s economic data and stronger-than-expected figures from China. Let’s start with the Chinese data dump, shall we?

The world’s second largest economy confirmed that quarterly growth was still in line with expectations, as the Q2 2015 GDP reading came in at 7.0% instead of dipping to the projected 6.9% figure. Retail sales increased by 10.6% year-over-year in June, beating the consensus of a 10.2% gain, while industrial production rose from May’s 6.1% figure to 6.8% last month. Fixed asset investment remained steady at an 11.4% annualized increase for June. Think these numbers are too good to be true? You’re not alone.

Nonetheless, risk appetite seems to have popped its head back in the market, allowing the most Asian equities and higher-yielding currencies to gain traction. In Australia, new motor vehicle sales rebounded by 3.8% in June after declining by 0.8% in May while the Westpac consumer sentiment index showed a smaller 3.2% decline compared to the previous 6.9% drop.

AUD/USD is up 22 pips (+0.29%) and NZD/USD is holding steady at .6700 (+0.03%). The Canadian dollar is looking slightly weaker compared to its forex rivals though, as the Iran nuclear deal appears to be weighing on crude oil prices.

Yen pairs tried to get a piece of the action when BOJ Governor Kuroda stepped up to the plate to deliver their interest rate statement. As expected, the Japanese central bank kept monetary policy unchanged for the time being.

USD/JPY is holding on to 123.50 (+0.01%), EUR/JPY is moving sideways around 135.75 (-0.02%), and GBP/JPY is up 18 pips and testing the resistance at 193.00 (+0.09%). The pound has been able to sustain its forex gains after yesterday’s hawkish BOE Inflation Report, and the upcoming jobs release from the U.K. should spur more movement from GBP pairs.

Analysts are expecting to see an 8.9K drop in claimants, a faster pace of decline compared to the previous 6.5K reduction. This should be enough to keep the jobless rate steady at 5.5%, but what market watchers are more interested to see is whether or not wage growth strengthened. Average earnings are expected to rise from a three-month average of 2.7% to 3.3%, which would support BOE policymakers’ claims that domestic growth and price levels are looking hella good.

Other event risks for the upcoming trading session include updates on the Greek parliament meetings which are expected to either reject or accept the latest bailout proposal. Although this proposal got the thumbs-up from the country’s creditors, Greek Prime Minister Alex Tsipras seems to be encountering a bit of resistance on the local front, even from his own anti-austerity Syriza party. In other words, the debt drama ain’t over yet so y’all better stay tuned!

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!