Asian Session Forex Recap – July 12, 2016

  • Japan’s PPI down by 4.2% vs. 4.1% decrease expected, 4.3% decline in May
  • Australia’s NAB business confidence up from 3 to 6 in June
  • Australia’s NAB business conditions up from 10 to 12 in June
  • Japan’s tertiary industry activity slips by 0.7% as expected vs. 0.7% increase in April

Risk appetite is still the name of the game during the Asian session, as optimism over Shinzo Abe’s stimulus program continued to pushed the Asian bourses higher for another day.

Major Events:

Updates on Japan’s stimulus package – The biggest story of the hour is still the prospect of Japan receiving another round of fiscal and monetary stimulus. The plot is thickening with Prime Minister Shino Abe set to meet former Fed Governor Ben Bernanke today at 3 PM Tokyo time. Bernanke’s presence in the meetings strengthens speculations that Abe will implement “helicopter money” measures such as monetizing budget deficit and directly giving money to the private sector.

The prospect of more money boosted the Asian equities though the lack of details limited the rallies. For starters, Chief Cabinet Secretary Suga has said that he doesn’t know the scale of the package just yet while Finance Minister Aso said that he’s prepared to launch the new package…as soon as Abe orders it.

The Nikkei is up by 2.46%, Australia’s ASX is up by 0.30%, Hang Seng is up by 0.89%, and the Shanghai index is up by 1.76%.

Australia’s data releases – The Aussie also got a push from Australia’s business survey releases. Business confidence rose by 3 points while business conditions rose by 6 points in the month of June. Since the survey covered the post-Brexit brouhaha as well as the pre-Federal elections drama, the reports bode well for business spending in Australia.

Major Market Movers:

JPY – The yen slipped lower again today thanks to continued optimism over Japan’s next stimulus package.

USD/JPY is 19 pips higher (+0.19%), EUR/JPY popped up by 40 pips (+0.35%), and GBP/JPY rose by a whopping 97 pips (+0.73%).

USD – The dollar failed sustain its bullish momentum on the back of risk appetite that drove the higher-yielding currencies higher.

EUR/USD is up by 19 pips (+0.17%), GBP/USD is up by 75 pips (+0.58%), and USD/CAD is down by 15 pips (-0.11%).

AUD – The Aussie took advantage of Australia’s better-than-expected business survey releases and the overall risk appetite in the markets.

AUD/USD is up by 49 pips (+0.65%), AUD/JPY is up by 62 pips (+0.80%) and EUR/AUD is down by 91 pips (-0.62%).

Watch Out For:

  • 7:00 am GMT: German final CPI expected to remain at 0.1%
  • 7:00 am GMT: German WPI expected to slip from 0.9% to 0.3% in June
  • 9:30 am GMT: BOE’s Financial Policy Committee meeting minutes
  • 10:00 am GMT: BOE Governor Mark Carney to give a speech before the Treasury Select Committee in London

See more:

U.S. Session Forex Recap

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