U.S. Session Recap – April 18, 2014

  • CA CPI grows by 0.6% vs. 0.4% expected
  • US initial jobless claims up by 2K at 304K vs. 302K previous
  • US Philly Fed mfg index clocks in at 16.6 vs. 10.0 index reading expected
  • Chinese Premier Li: “No stimulus as long as growth is around 7.5%”
  • Japanese Cabinet cuts growth forecasts but doesn’t see need for more stimulus

Make way for the king of pips! The Greenback dominated most of its counterparts yesterday after a couple of forex trading catalysts lined up in its favor.

First, the U.S. printed positive reports. Initial jobless claims only went up by 2,000, which still puts the report’s 4-week average near its lowest since October 2007. The Philly Fed index also came in way better than market geeks had expected.

Another factor that spurred the dollar bulls was the rise in U.S. bond yields. 10-year yields rose to 2.728%, its highest since April 7, probably on the back of positive reports, the Fed’s optimism, and a strong equities performance. Last but not the least, traders who had been selling the Greenback all week long likely took profits ahead of the long Easter weekend.

European currency pairs like EUR/USD and GBP/USD were on their way to their new monthly highs before Uncle Sam printed positive reports. EUR/USD was trading above 1.3850 while GBP/USD was already above 1.6800 before both pairs encountered selling to the tune of 50 pips.

Comdolls like AUD/USD and NZD/USD didn’t have any luck either. Aside from dealing with dollar strength they also traded on the news that China isn’t planning on adding more stimulus as long as Chinese growth is near the 7.5% levels. Only the Loonie was able to limit its losses after Canada’s CPI printed to the upside.

Today we have a potential ghost town in the Asian markets with Australia and New Zealand on Good Friday holidays. Keep an eye out for continuation of yesterday’s price action, reaction to Japan’s downgraded growth forecasts and newly-released tertiary activity index, and possible rogue spikes due to low liquidity.

Good luck and good trading!

See also:

London Session Recap

Bonnie and Clyde, peanut butter and jelly, Justin Bieber and his hair. 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!