Asian Session Forex Recap – June 17, 2016

  • NZ business NZ manufacturing index up from 56.6 to 57.1 in May
  • NZ ANZ job ads up by 0.2% in May vs. 1.7% uptick in April

Risk taking was the name of the game during the Asian session, as easing Brexit concerns and a bit of jawboning from Japan’s officials improved risk sentiment.

Major Events:

Easing of Brexit concerns – Anxieties over a possible Brexit eased during the Asian session following the death of Jo Cox, a U.K. Parliament member who was a major advocate for Britain remaining in the EU.

Both the Remain and Leave camps have agreed to suspend their campaigns until the weekend while there are (unconfirmed) rumors of possibly suspending the vote scheduled next week. If you recall, the most recent polls have been reflecting leads for the “Leave” camp, which have been weighing on risk appetite for the past couple of days.

However unfortunate the headline may be, it still inspired relief rallies for the high-yielding investments. Along with the Asian bourses we also saw increases for oil prices and the high-yielding currencies.

Jawboning from Japan’s officials – The yen gave up even more pips to its counterparts thanks to an overall risk aversion theme in the markets. It also helped that the Ministry of Finance (MoF), Bank of Japan (BoJ), and the Financial Services Agency (FSA) held a scheduled meeting today.

Though there were no official announcements made, Finance Minister Taro Aso was quoted saying that he was “deeply concerned” about the “one-sided, rapid, and speculative” currency moves and that they would respond urgently if necessary. Sure looks like a currency intervention threat to me!

Major Market Movers:

USD and JPY – The low-yielding currencies took the most hits in a profit-taking, risk-appetite environment during the Asian session.

USD/JPY shot up to a high of 104.85 before coming back down to 104.24 while EUR/USD is up by 8 pips (+0.07%). Even the comdolls got a few licks in with AUD/USD rising by 11 pips (+0.15%) and USD/CAD slipping by 26 pips (+0.20%).

GBP – Not surprisingly, the pound benefited the most from eased concerns of a Brexit. GBP/USD shot up by 31 pips (+0.22%), GBP/JPY is up by 15 pips (+0.10%), and EUR/GBP slipped by 11 pips (-0.14%).

Watch Out For:

  • 9:00 am GMT: Euro Zone current account (24.7B EUR expected vs. 37.2B EUR previous)
  • 9:00 am GMT: Italian trade balance (5.95B EUR expected vs. 5.37B EUR previous)
  • ECOFIN meetings in Brussels on-going

See more:

U.S. Session Forex Recap

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