Asian Session Forex Recap – May 23, 2016

  • Japan’s trade surplus widens from 0.30T JPY to 0.43T JPY in April
  • Japan’s flash manufacturing PMI down from 48.2 to 47.6 vs. 48.3 expected
  • Japan’s flash all industries activity up by 0.1% vs. 0.7% expected, -0.9% previous

The Greenback started the day on a weak footing, as profit-taking from last week’s moves dominated the Asian forex trading session.

Major Events:

Japan’s trade surplus – Japan’s trade surplus rose from 755B JPY in March to 823.5B JPY in April. This not only marks the largest surplus since March 2010, but also the longest stretch of trade surpluses since late 2010.

Looking deeper into the report though, the details aren’t as rosy. See, the jump in surplus was mostly due to imports falling faster than exports. Imports fell by 23.3% (vs. 19.0% decline expected) from a year ago while exports only dropped by 10.1%.

Destinations-wise, the numbers aren’t looking good either. The value of exports to Asia fell by 11.8% in April 2015 compared to March’s 9.7% decline. Exports to the U.S. fell also fell by 11.8% (vs. 5.1% decline last month) while exports to China dropped by 7.6% (vs. 7.1% decline in March).

Profit-taking in the works? – The Greenback took a step back against its counterparts today, possibly thanks to profit-taking. If you recall, the dollar had good run after the Fed’s latest meeting minutes put an interest rate hike in June or July back on the table.

Major Market Movers:

JPY – The yen popped up at the release of Japan’s trade balance reports but soon lost value after forex traders had taken a second look at the release.

USD/JPY fell to a low of 109.64 before recovering to 109.89, EUR/JPY slipped to 123.15 before inching back up to 123.42, and GBP/JPY dropped to 159.03 before closing at 159.55.

USD – The Greenback lost pips across the board on a bit of profit-taking from last week’s bullish run. EUR/USD is up by 20 pips (+0.18%), GBP/USD is up by 12 pips (+0.08%), and AUD/USD is up by 34 pips (+0.47%).

Watch Out For:

  • 7:00 am GMT: French flash manufacturing PMI (49.0 expected vs. 48.0 previous)
  • 7:00 am GMT: French flash services PMI (50.8 expected vs. 50.6 previous)
  • 7:30 am GMT: German flash manufacturing PMI (52.1 expected vs. 51.8 previous)
  • 7:30 am GMT: German flash services PMI (54.6 expected vs. 54.5 previous)
  • 8:00 am GMT: Euro Zone flash manufacturing PMI (51.9 expected vs. 50.8 previous)
  • 8:30 am GMT: Euro Zone flash services PMI (53.3 expected vs. 53.1 previous)

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!