Asian Session Forex Recap – June 20, 2016

  • NZ Westpac consumer sentiment down from 109.6 to 106.0
  • U.K. Rightmove HPI up from 0.4% to 0.8% in June
  • Japan prints first trade deficit in four months

Risk appetite was the name of the game during the Asian forex trading session, as easing Brexit fears boosted the higher-yielding investments.

Major Events:

Weekend gaps, weekend gaps everywhere – Wondering why you there are little gaps on your charts this week? Well, you don’t have far to look. Over the weekend a string of fresh Brexit polls showed the tides turning in favor of the “Remain” camp. Here’s the list in case you missed them:

Opinium poll (44% Remain, 44% Leave, 12% Undecided)
YouGov poll (44% Remain, 43% Leave, 13% Undecided)
Survation poll (45% Remain, 42% Leave, 13% Undecided)

If you recall, last week the Leave camp was leading (and worrying the markets) right up until the death of Brexit supporter MP Jo Cox. Now that the polls are shifting against a Brexit, market players are getting their appetite for risk back. The higher-yielding currencies are up along with the Asian indices and oil prices.

Japan’s trade balance – The Land of the Rising Sun posted a trade deficit for the first time this year, as exports got weighed down by lower global demand.

Exports fell by 11.3% from a year earlier in May, faster than the 10.1% decline in April and is the 17th consecutive month of decline for the metric. Meanwhile, imports dropped by 13.8% on the back of lower oil and energy-related goods.

This put Japan’s unadjusted figures to a deficit of 40.7B JPY from a surplus of 823.2B JPY in April. On an unadjusted basis, Japan’s trade surplus shrank from 397B JPY in April to 269.6 B JPY in May. Will these numbers bring back rumors of a currency intervention by the BOJ?

Major Market Movers:

JPY –The low-yielding yen took hits during the Asians session thanks to a bout of risk-taking and Japan’s weaker-than-expected trade numbers.

USD/JPY gapped higher and is trading 43 pips higher (+0.41%) than last week’s closing price while EUR/JPY is up by 62 pips (+0.52%) on the session. Meanwhile, AUD/JPY also inched 21 pips (+0.27%) higher.

GBP – The pound gapped higher on the back of the anti-Brexit polls released over the weekend.

GBP/USD rocketed by 129 pips (+0.89%), GBP/JPY shot up by 138 pips (+0.91%), and EUR/GBP fell by 33 pips (-0.42%).

Comdolls – Commodity-related currencies like the Aussie, Loonie, and Kiwi all had a field day thanks to a risk-friendly trading environment and the increase in oil prices.

AUD/USD is up by 18 pips (+0.24%), USD/CAD is down by 19 pips (-0.15%), and NZD/USD is up by 43 pips (+0.61%).

Watch Out For:

  • 7:00 am GMT: German PPI (0.4% expected vs. 0.1% previous)
  • 11:00 am GMT: German BundesBank monthly report

See more:

Check out Last Week’s Top Movers!

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  • David

    Hello, I’ve seen that lately you don’t write US session recap for Fridays anymore. Why? =(

    • Pip Diddy

      Hi David!

      I just thought that it would be redundant since I also have my Top Forex Market Movers of the Week. Also, if an event or report during the U.S. session is a market mover, but it’s not enough to put the currency in the top 2 or 3 winners or losers, I usually just add it as a bonus item.

      I hope that clarifies things a bit.

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