Asian Session Forex Recap – July 28, 2016

  • AU quarterly import prices down by 1.0% vs. 1.6% uptick expected, 3.0% decline in Q1 2016
  • AU quarterly export prices up by 1.4% vs. 4.7% decline in Q1 2016

The Greenback continued to inch lower against its counterparts, as Asian session forex traders caught up to yesterday’s price action.

Major Events:

FOMC hangover and slight risk aversion – The dollar lost a couple more pips across the board following a not-so-specific FOMC statement yesterday. The Fed’s release was relatively upbeat and one member voting for a rate hike, but overall, the statement still didn’t give clues on the Fed’s rate hike schedule.

Mixed risk sentiment – Most of the Asian bourses capped the day in the red, as a disappointing FOMC release got mixed in with fears of asset bubbles in China’s property, and securities, and commodities markets. The Australian market was spared though, thanks mostly to higher commodity prices and better-than-expected quarterly import and export figures from the Land Down Under.

Japan’s stimulus updates – Earlier today Reuters caused a bit of ruckus when it printed potential details on Abe’s 28 trillion JPY (more than 5% of Japan’s GDP) stimulus.

Citing two sources “briefed on the matter,” Reuters said that around 7 trillion yen would go to direct government spending while 6 trillion yen would go to fiscal loan and investment programs that would help spur private-sector spending. The remaining 15 trillion will come from quasi-government institutions that provide loans, subsidies, and loan guarantees. The sources haven’t provided details on the government’s spending schedule, but are expecting the Cabinet to approve the finalized plans next week.

Major Market Movers:

JPY – The yen popped higher across the board on a bit of risk aversion and disappointing updates on Abe’s stimulus plans.

USD/JPY is down by 37 pips (-0.35%) to 104.86, EUR/JPY is down by 20 pips (-0.17%) to 116.11, and GBP/JPY is down by 27 pips (-0.19%) to 138.60.

Comdolls – Higher commodity prices and dollar weakness gave the comdolls the one-two punch they needed to rise higher today. In the Aussie’s case, the cherry on top of the sundae was Australia’s quarterly trade prices.

AUD/USD is up by 42 pips (+0.56%) to .7525, USD/CAD is down by 60 pips (-0.46%) to 1.3130, and NZD/USD is up by 44 pips (+0.62%) to .7113.

Watch Out For:

  • 7:00 am GMT: U.K. Nationwide house price index (0.0% expected, 0.2% previous)
  • 8:00 am GMT: Spanish unemployment rate (20.5% expected, 21.0% previous)
  • 8:55 am GMT: German unemployment change (-3K expected, -6K previous)

See more:

U.S. Session Recap

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