U.S. Session Recap – June 2, 2014

  • CA annualized quarterly GDP up by 1.2% vs. 1.8% expected
  • CA monthly GDP up by 0.1% as expected vs. 0.2% previous
  • US core PCE up by 0.2% as expected
  • US personal spending down by 0.1% vs. upwardly revised 1.0% growth last month
  • US personal income up by 0.3% vs. 0.5% last month
  • US Chicago PMI clocks ni at 65.5 vs. 61.0 expected
  • US final UoM consumer sentiment down to 81.9 vs. 82.5 expected

Profit-taking was the name of the game as traders finished the last forex trading session for the month of May.

If you’ve read my London session update, then you’ll know that volatility was limited at the start of the trading session. Luckily for day traders, volatility picked up around the end of London session trading. Whether risk appetite picked up because of mostly better-than-expected U.S. data or traders took profits ahead of the last May weekend, risk appetite was up for a couple of hours.

EUR/USD jumped from 1.3600 to 1.3650 in two hours while GBP/USD also climbed around 30 pips to the 1.6780 area. The pro-European currency moves were seen across the board with GBP/JPY also climbing by 30 pips to 170.70; GBP/AUD rising by 50 pips to the 1.8050 area; EUR/JPY jumping by 50 pips to 138.85, and EUR/CAD flying by a whopping 80 pips.

Not surprisingly, low-yielding currencies like the dollar took the losses. USD/JPY encountered resistance at the 101.80 area while USD/CHF fell by around 40 pips to the .8950 area.

The Loonie was also one of the biggest losers of the trading session as Canada’s quarterly GDP numbers missed estimates. The economy only grew by 1.2% (instead of the expected 1.8%) as domestic demand, which includes household, government, and business spending, shrank for the first time since 2009. This increases the BOC’s incentive to keep rates steady (if not cut it) for the next couple of months. USD/CAD jumped by 40 pips before it found resistance around the 1.0870 area.

China’s markets are out for the Dragon Boat Festival today, but that doesn’t mean that we won’t see volatility. At 12:30 am GMT we’re seeing Australia’s MI inflation gauge, followed by its building approvals and quarterly company operating profits at 1:30 am GMT. Market players are generally expecting better-than-previous numbers, so watch your Aussie trades closely!

See also:

London Session Recap

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