Asian Session Forex Recap – June 27, 2016

  • NZ trade surplus up by 358M NZD vs. 185NZD expected, 326M previous
  • China’s industrial profits up by 3.7% in May vs. 4.2% growth in April

A pretty quiet start to the week, as a lack of catalyst forced forex traders to stay in the sidelines.

Major Events:

Gaps, weekend gaps everywhere – The bloodbath ain’t over yet for the high-yielding currencies! Thanks to Britain’s decision to leave the EU, a lot of forex traders have continued to unwind their high-yielding positions. This is probably why you can now see gaps to the downside for most of the major currency pairs.

PBoC fixes yuan to its lowest since 2010 – The People’s Bank of China (PBoC) set the USD/CNY midpoint fix at 6.6375 today, a whopping 0.9% weaker than last Friday’s figure. This marks the biggest drop since August 2015 and the lowest level for the fix since December 2010.

Obviously, the move is set to counter the Greenback’s appreciation following last week’s Brexit brouhaha. Unfortunately for the central bank, USD/CNY has gone on to trade at 6.6387, the highest the yuan has traded since January 2011.

Japan’s officials huddle to contain market jitters – Japan’s PM Shinzo Abe called for a huddle between him, BOJ Governor Haruhiko Kuroda, and Finance Minister Taro Aso to discuss the Brexit aftermath.

BOJ Deputy Governor Hiroshi Nakaso revealed that the team will ensure liquidity in the yen and other foreign currencies and is willing to tap into the currency swap lines established among six central banks if needed. No comment yet on potential currency interventions though.

UK Chancellor George Osborne to give a speech – Last Friday BOE Governor Mark Carney held a presser to attempt to control the markets. Today at 6:00 am GMT U.K. Chancellor George Osborne will take another shot at it. Will he have better luck than Carney?

Major Market Movers:

JPY – The yen gapped higher at the start of the week despite reassurances from Japan’s officials.

USD/JPY is still below the 102.00 levels while EUR/JPY is trading just above the 112.00 handle. Even AUD/JPY gapped 70 pips lower and has yet to come up for air.

Comdolls – High-yielding currencies took another step back today, thanks to overall risk aversion and weaker commodity prices.

AUD/USD is down by 21 pips (-0.28%), USD/CAD is up by 38 pips (+0.29%), and NZD/USD is down by 26 pips (-0.37%).

Watch Out For:

  • 6:00 am GMT: UK Chancellor George Osborne to give a speech
  • 9:00 am GMT: Euro Zone private loans (y/y) (1.6% expected vs. 1.5% previous)

See more:

Check out Last Week’s Top Movers!

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!