Asian Session Forex Recap – May 13, 2016

  • Japan’s tertiary industry index down by 0.7% in March vs. 0.2% decline expected, 0.1% drop previous
  • All eyes on the U.S. reports on tap

With no major reports on deck, Asian session forex traders caught up to the U.S. session’s themes and set their sights on the upcoming European GDP numbers and U.S. retail sales report.

Major Events:

Overall risk aversion – With no major releases today, forex traders mostly priced in yesterday’s bout of risk aversion. If you recall, U.S. technology stocks received a blow with Apple sinking to its lowest since June 2014. The Asian markets caught the bearish bug with Nikkei falling by 1.34%, Hang Seng slipping by 1.27%, the Shanghai inching 0.16% lower, and Australia’s ASX also falling by 0.71%.

Oil prices also added to the bulls’ headaches; as it pulled back some of its gains from earlier this week. Brent crude oil is down by 0.60% to $47.79 while U.S. crude oil is down by 0.77% to $46.33.

Hawkish Fed members – As I mentioned in my U.S. session update, a few FOMC members went under the spotlight to show their optimism for the U.S. economy.

FOMC member Loretta Mester talked about stable inflation expectations; Fed official Rosengren said that the probability of a rate hike is greater than what’s priced in, and FOMC member George shared his bias against negative interest rates. Not surprisingly, the dollar snuck in a couple more pips across the board

All eyes on today’s U.S. reports – Today at 12:30 pm GMT Uncle Sam will print a couple of top-tier reports including the PPI, consumer sentiment, and retail sales numbers. The latter will likely be the most closely-watched, as the U.S. economy is highly dependent on consumer activity. Read Forex Gump’s trading guide if you’re planning on trading the event!

Major Market Movers:

USD – The dollar inched higher against its counterparts thanks to overall risk aversion and a bit of optimism from the FOMC members.

GBP/USD slipped by 7 pips (-0.05%), AUD/USD dropped by 27 pips (-0.37%), and NZD/USD fell by 15 pips (-0.22).

JPY – The low-yielding yen also took advantage of the overall risk aversion in the markets. USD/JPY is down by 26 pips (-0.24%), EUR/JPY is down by 29 pips (-0.23%), and GBP/JPY is down by 46 pips (-0.29%).

CAD – The oil-related Loonie caught the attention of the bears when oil prices slid during the trading session.

USD/CAD shot up to 1.2870 before settling down to 1.2849 while EUR/CAD rose to 1.4635 before sliding back to 1.4615. Meanwhile, CAD/JPY just straight up fell by 30 pips (-0.35%).

Watch Out For:

  • 6:00 am GMT: German preliminary quarterly GDP (0.6% expected vs. 0.3% previous)
  • 6:00 am GMT: German final CPI expected to remain at -0.2%
  • 8:00 am GMT: Italian preliminary quarterly GDP (0.3% expected vs. 0.1% previous)
  • 8:30 am GMT: U.K. construction output (-2.8% expected vs. -0.3% previous)
  • 9:00 am GMT: Euro Zone flash quarterly GDP expected to remain at 0.6%

See more:

U.S. Session Forex 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!