Asian Session Forex Recap – July 31, 2015

  • Japanese household spending down by 2.0% vs. projected 2.0% gain
  • Japan’s national core CPI posted 0.1% uptick instead of staying flat
  • Tokyo core CPI showed 0.1% drop vs. 0.0% consensus
  • Japanese jobless rate climbed from 3.3% to 3.4% in June
  • New Zealand ANZ business confidence index slumped from -2.3 to -15.3
  • Australian producer prices up 0.3% in Q2 vs. 0.2% forecast, 0.5% previous
  • Australia’s private sector credit up by 0.4% vs. 0.5% forecast and previous
  • Euro zone flash CPI readings due today

Yen forex pairs enjoyed a bit of volatility in today’s Asian trading session, thanks to Japan’s data dump, but most of ’em landed back in their ranges. USD/JPY is down 17 pips (-0.15%) and has broken below 124.00, EUR/JPY is hovering above the 135.50 mark (-0.06%), GBP/JPY is trading 11 pips lower (-0.06%), and AUD/JPY is holding steady at 90.50 (+0.04%).

The latest economic numbers from Japan were mostly weaker than expected, with only the national core CPI beating the consensus with a 0.1% uptick in price levels instead of showing a flat reading. Household spending slumped by 2.0% year-over-year versus the projected 2.0% gain while the jobless rate climbed from 3.3% to 3.4% in June. Tokyo’s core CPI was also subpar, as it showed a 0.1% drop instead of staying flat.

New Zealand had its share of bleak data, as ANZ reported that business confidence turned sour this month. The index fell from -2.3 to -15.3, reflecting increased pessimism among businesses in the country due to a number of economic factors, including falling commodity prices. So far so good for Australia, as the quarterly PPI report showed a stronger-than-expected 0.3% increase in producer prices for the second quarter of the year. However, private sector credit came in a tad below expectations with a 0.4% gain instead of the estimated 0.5% increase.

AUD/USD is making its way back above the .7300 handle (+0.22%) while NZD/USD resumed its drop below .6600 (-0.15%). AUD/NZD is up 47 pips (+0.43%) and is moving close to the 1.1100 major psychological resistance.

Up ahead, forex traders could turn their attention to the release of the euro zone flash CPI readings at 9:00 am GMT. The headline CPI could show a 0.2% increase in price levels while the core CPI could print a 0.8% gain. Stronger than expected data could allow the shared currency to stay afloat, even as Greek debt troubles are hitting the newswires once more. Word from Athens is that the IMF is having doubts about being on board with the third bailout and that Germany is still strongly opposed to the idea of debt relief.

Also lined up for today are a few medium-tier reports from the euro zone, namely the German retail sales and French consumer spending numbers. Italy is also set to print its unemployment rate and CPI estimate. There are no reports due from the United Kingdom so pound forex pairs might be in for a bit of consolidation or could move to the tune of risk sentiment. Be on the lookout for any profit-taking activity since it’s the end of the month!

See also:

U.S. Session Recap

Bonnie and Clyde, peanut butter and jelly, Kanye West and Kanye West. 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!